Toronto-Dominion Bank agreed to buy Chrysler Financial Corp from Cerberus Capital Management LP for $6.3 billion in cash, adding an auto-finance company in its second-largest acquisition.
The purchase includes $5.9 billion in assets and about $400 million in goodwill, Canada’s second-biggest bank said today in a statement. Toronto-Dominion doesn’t intend to issue stock or bonds.
Canadian lenders, ranked the soundest by the World Economic Forum, are using their excess capital to expand abroad after asset values plunged following the financial crisis. Bank of Montreal last week made its biggest acquisition, agreeing to pay $4.1 billion for Marshall & Ilsley Corp, Wisconsin’s biggest bank.
Toronto-Dominion Bank said it expects US earnings to top its target of $1.6 billion a year in three years with the Chrysler Financial purchase, Chief Financial Officer Colleen Johnston told analysts today on a call.The Toronto-based lender owns a consumer bank with 1,300 branches in 16 US states.
