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Thursday, July 22, 2010

GM buys AmeriCredit

Thursday GM announced its plan to purchase sub-prime lender AmeriCredit for $3.5 billion (yes, billion) dollars cash.  The acquisition is expected to close by 4th quarter 2010.

Read the entire article by Melly Alazraki, GM to aquire AmeriCredit for $3.5 Billion.

I expect with all the economic changes we are seeing, this type of transaction will become more and more common over the next 2-3 years.  Tightening credit guidelines are going to make it harder for consumers to get standard loans and large car dealers are going to need the extra leverage they will get from the sub-prime market.

What sub-prime lenders do you see being bought out over next few years?

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