General Motors Sells GMAC for $7 Billion

April 3, 2006 8:30 AM, EDT

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eneral Motors Corp. said Monday that it has sold a majority of its General Motors Acceptance Corp. unit to a group led by Cerberus Capital Management LP for $7.4 billion.

Cerberus, along with Citigroup Inc., will buy a 51% stake in GMAC, and the unit will net a total of about $14 billion over three years, GM said in a statement.

The automaker will receive about $10 billion by the time the sale is closed, it said.

The sale may allow GMAC to regain its investment rating if ratings services determine that the new buyers have a more stable financing capability than GM, Bloomberg reported.

GM, the No. 1 automaker, has not had a profit in the past five quarters.