The Pension Benefit Guaranty Corp. will not hold General Motors Acceptance Corp., the financing arm of US auto manufacturer General Motors, responsible for employee benefit plans, removing a major hurdle in the sale, according to a GM regulatory filing on Thursday.
The investor consortium led by Cerberus Capital Management – a private investment firm headquartered in New York – set to buy the unit for $14 billion (€11 billion) had set such an assurance as a condition for successful closure of the deal. The Cerberus-led group agreed to buy a 51 percent stake in GMAC in April.
The consortium received a letter from the PBGC saying the federal pension insurer will not terminate GM’s pension plans or transfer any liability for the plan to the GMAC buyers.
The high-profile deal would include a $6 billion contribution from Cerberus. Although additional purchase stipulations and regulatory approvals must be met before the deal is finalised, if it goes through Cerberus would control the seventh-largest financial institution in the US based on assets.
The investor consortium also includes Citigroup, Aozora Bank, and a subsidiary of the PNC Financial Services Group.
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