By Vicki Needham - 07/23/10 05:20 PM EDT
The acquisition could help GM sell to customers with damaged credit ratings or who want to lease a car. GM officials called the purchase a “building block” on the road to an initial public offering, which could happen later this year.
Grassley expressed concern that GM paid a 24 percent premium for the loan company, “meaning that GM managed to pay over $800 million more for the company than it was worth in the public markets just a few days ago.”
GM will use funds from some of the $30 billion in cash on hand, according to GM officials.
“Over the long run, will the acquisition of AmeriCredit at the price paid by GM increase the likelihood that the American taxpayer will recover more of its money from GM than currently estimated?” Grassley asked in the letter. “At a minimum, the American people deserve to know whether GM conducted an analysis of this acquisition with the best interests of the taxpayer in mind.”
GM received $49.5 billion in government loans, and the Treasury owns 61 percent of the automaker. GM has announced plans to sell the government-owned stock and go public again as a way to pay back its debt with the federal government, possibly later this year.