Wells Fargo 'may buy GMAC unit'

24 March 2010

Wells Fargo is in an advanced stage of negotiations with auto finance company GMAC about buying its factoring business unit, sources close to the deal have said.

An agreement between the two parties may be finalised this week, one of the unnamed insiders told Bloomberg.

If a deal to sell the unit is reached, the factoring business division will be integrated into Wells Fargo Trade Capital.

GMAC is attempting to divest itself of parts of its business not directly related to its auto financing work in an attempt to repay the three bailouts it received during the financial crisis.

In its fourth quarter results, GMAC said it was looking to sell off the factoring unit, which contains $233 million worth of loans and finance receivables.

Wells Fargo was another beneficiary of Troubled Asset Relief Program funding from the government and launched a $10.4 billion common stock offering last December to help it pay back debts of $25 billion.

By Claire Archer

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