GM shares rose 28 cents, or 1.3 percent, to $21.55 in early trading on the
New York Stock Exchange.
GM Chairman and Chief Executive Rick Wagoner said Monday the sale was an
important part of efforts to restore GM to profitability.
Despite the boost GMAC is giving to the automaker's bottom line, GM has
sought to sell the GMAC stake to raise cash and restore the division's debt
ratings, which were downgraded along with GM's to junk status last year. A
rating below investment grade makes it harder and more expensive to borrow
money.
"This agreement is another important milestone in the turnaround of General
Motors. It creates a stronger GMAC while preserving the mutually beneficial
relationship between GM and GMAC," Wagoner said in a statement. "At the same
time, it provides significant liquidity to support our North American turnaround
plan, finance future GM growth initiatives, strengthen our balance sheet and
fund other corporate priorities."
Under the deal, GMAC will continue to provide GM and its dealers with the
same range of financial products and services. GM will have a 10-year option to
acquire GMAC's automotive finance operations, provided GM has an
investment-grade debt rating and meets certain other conditions.
GMAC Chairman and Chief Executive Eric Feldstein will continue to lead the
company after the sale.
News of the deal came amid speculation that Wagoner's future with the company
is in doubt. GM's board of directors, which approved the sale at a special
meeting Sunday, used Monday's announcement to reaffirm its support for Wagoner.
"While there is still much work to be done, the GM board has great confidence
in Rick Wagoner, his management team and the plan they are implementing to
restore the company to profitability," presiding director George Fisher said in
a statement.