General Motors Corp., the world’s largest automaker, may announce an agreement Monday to sell control of its finance unit to investors led by Cerberus Capital Management LP, three people with direct knowledge of the matter said.
Cerberus, based in New York, is teaming with investors including Citigroup Inc.’s private-equity unit to bid for General Motors Acceptance Corp., said the people, who declined to be identified before a formal agreement is reached. The Cerberus-led group offered about $11 billion in January for 51 percent of GMAC, a provider of auto loans, insurance and mortgages, one of the people said.
The plus is the $11 billion that GM would get from the deal right now,” said David Healy, an analyst at Burnham Securities Inc., who owns GMAC notes. “The minus is the billions of dollars that GM has been getting from GMAC would be cut in half.”
A sale would bring GM Chief Executive Officer Rick Wagoner a step closer to reducing the cost of making auto loans by regaining an investment-grade rating for GMAC. GMAC’s credit rating, along with its parent’s, was cut to junk last year as the company reported losses of $10.6 billion. Detroit-based GM is selling assets, firing workers and trying to get union workers to quit to cut losses.