Toronto-Dominion Bank is buying Chrysler Financial for $6.3 billion, the second time in a week that a Canadian lender has placed a big bet on the U.S. economic recovery.Tuesday’s cash deal, which includes about $400 million in goodwill, will make Canada’s No. 2 bank one of North America’s biggest bank-owned auto lenders. The bank won’t issue any stock to fund its purchase from Cerberus Capital Management, a feature that helped push TD shares up nearly 4 percent.
“The TD Bank acquisition of Chrysler Financial is an example of what can happen when foreign banks are financially strong, flush with cash, and want to expand into the lucrative U.S. market,” said Mark Williams, a risk-management expert at the Boston University School of Management.
“U.S. retail banks, such as Bank of America, have plenty to fear. The Canadian bankers are upon us.”
This deal follows Friday’s $4.1 billion purchase of Wisconsin-based Marshall & Ilsley Corp by Canada’s No. 4 lender Bank of Montreal, although BMO irked the market by issuing $800 million in stock to fund its deal.
