RBC to acquire Ally's Canadian auto finance business

Tue Oct 23, 2012 8:20am EDT

Oct 23 (Reuters) - Royal Bank of Canada said on Tuesday it has agreed to acquire the Canadian auto finance and deposit business of Ally Financial Inc for a $1.4 billion investment net of excess capital, in a move to expand its auto lending business.

Ally, the U.S. auto lender majority owned by the U.S. Treasury, announced plans in May to sell its international operations in an effort to speed up repayment of government bailouts it received during the financial crisis.

The lender, which is the former auto lending arm of General Motors Co, last week agreed to sell its Mexican insurance business to insurance and reinsurance company ACE Ltd for $865 million in cash.

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