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General Motors Co 8-K Report, Material Agreement (Jul 23, 2010)

Filed July 23, 2010For Securities:GM

Summary

General Motors Company (GM) announced a significant strategic move with the entry into an Agreement and Plan of Merger with AmeriCredit Corp. (AmeriCredit) on July 21, 2010. This transaction, conducted through GM's wholly owned subsidiary GM Holdings LLC and its direct subsidiary Goalie Texas Holdco Inc., involves the acquisition of AmeriCredit for approximately $3.5 billion in cash. The merger is structured as a cash-out for AmeriCredit shareholders, with each outstanding share to be converted into $24.50 in cash, and all outstanding options and stock-based awards will also be cashed out based on this per-share value. This acquisition represents GM's strategic re-entry into the auto finance sector, an area it had previously divested. The deal is not subject to a financing condition but requires approval from AmeriCredit shareholders, antitrust clearance, and other regulatory approvals, with an expected closing in the fourth quarter of 2010. The retention of AmeriCredit's management team is anticipated, suggesting a focus on leveraging existing expertise. This move signals GM's intent to regain control over crucial aspects of its business model, particularly financing, which is vital for vehicle sales.

Key Highlights

  • 1GM is acquiring AmeriCredit Corp. for approximately $3.5 billion in an all-cash transaction.
  • 2The acquisition is being executed through GM's wholly owned subsidiary, GM Holdings LLC, and its subsidiary Goalie Texas Holdco Inc.
  • 3AmeriCredit shareholders will receive $24.50 in cash for each share of common stock.
  • 4Outstanding AmeriCredit stock options and awards will be cashed out based on the $24.50 per share value.
  • 5The merger is expected to close in the fourth quarter of 2010, subject to regulatory and shareholder approvals.
  • 6Two major AmeriCredit shareholder groups, representing approximately 42.5% of outstanding shares, have signed voting agreements to support the merger.
  • 7AmeriCredit's management team is expected to remain in place post-acquisition.

Frequently Asked Questions

This 8-K filing primarily announces GM's entry into a Material Definitive Agreement for the acquisition of AmeriCredit Corp. It details the terms of the merger, the purchase price, conditions for closing, and related shareholder agreements.

The anticipated aggregate consideration to be paid by GM Holdings to consummate the merger with AmeriCredit is approximately $3.5 billion.

Key conditions include approval of the merger by two-thirds of AmeriCredit's shareholders, expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, receipt of other required regulatory approvals, and certain other standard closing conditions. The transaction is not subject to a financing condition.

This acquisition marks GM's strategic re-entry into the auto finance business, which it had previously exited. It suggests a renewed focus on controlling the customer lifecycle and supporting sales through integrated financing solutions, potentially leveraging AmeriCredit's expertise to drive vehicle sales.