Chrysler Financial, which previously provided auto loans and leases to Chrysler customers and floor plan financing to dealers, will be sold to TD Bank Group for $6.3 billion.
Chrysler Financial was scheduled to shut-down and liquidate by the end of 2011, the U.S. Treasury Department announced in October, 2009. Chrysler Financial stopped giving consumers car loans and leases as a result of the Chapter 11 bankruptcy filing by Chrysler. GMAC, General Motors’ captive finance company, took over as the lending arm for shoppers who wanted to buy or lease a Dodge, Chrysler or Jeep vehicle. GMAC was also providing Chrysler dealers with floor plan financing.
At the time of the announcement in 2009, Cerberus Capital Management L.P., which owns Chrysler Financial, said it was unaware of any liquidation orders and that closing wasn’t part of its business plan.
TD Bank’s purchase includes Chrysler Financial in the U.S. and Canada. The acquisition will allow TD Bank to expand in the North American auto loan market. TD Bank said in a statement the purchase will enable it to significantly grow its consumer loan portfolio.
"Joining forces with TD will benefit both our customers and our dealer network," said Tom Gilman, CEO, Chrysler Financial. "Under Cerberus’s ownership, Chrysler Financial has preserved its technology platform, retained top talent and maintained key capabilities. This transaction positions us for future growth with the financial strength of TD, one of the soundest, best capitalized and best managed banks in the world."
TD said it expects to rebrand Chrysler Financial under the TD brand by spring 2011. TD also said Chrysler Financial plans to focus on the prime market.