Business & Finance
GMAC, the financing division of General Motors , said Tuesday it is selling $55 billion worth of its auto loan portfolio to Bank of America over the next five years. The deal was the second of such magnitude for Bank of America in recent weeks. On June 30, it bought credit card issuer MBNA for $35 billion. The latest deal is not expected to have much impact on GMAC's bottom line, since the assets involved are only a fraction of its holdings.
Cendant Corp., which oversees a vast travel and real estate empire, said it will sell its marketing services unit to Apollo Management, a private equity firm, for $1.83 billion. The deal, announced Tuesday, is part of Cendant's push to focus on its core businesses. Its brands include Avis, the car-rental company; Orbitz online travel-planning service; Century 21, the real estate giant; and the Days Inn lodging chain.
Northwest Airlines announced a "clearly unacceptable" second-quarter loss of $225 million and said that to avoid Chapter 11 bankruptcy proceedings it needs pension- reform and labor cost cuts. Fuel costs that are 52 percent higher than at this time a year ago also will force reduced service to some cities, the carrier said, although they weren't specified.
The cellphone industry consolidated further, with France Telecom announcing that it will acquire Amena, the third-largest service provider in Spain, for $7.7 billion. The buyer also agreed to assume $3.1 billion worth of Amena's debt. France Telecom said it intends to merge its land-line and Internet operations in Spain with Amena.
In other overseas business developments:
• Royal Bank of Scotland signed a nonbinding agreement to buy 15 percent of the stock in Bank of China, the South China Morning Post reported. When completed, the deal will be worth about $5 billion, the newspaper said.
• Caterpillar Inc., the world's largest builder of construction equipment, has joined the bidding to buy majority interest in Xugong Machinery, the No. 1 maker of such equipment in China, reports said. Terms were not disclosed. In December, Caterpillar agreed to acquire China's Shandong Machinery Co., a maker of wheeled loaders.
• Reuters hinted that as many as 500 more employees will lose their jobs over the next five years as it cuts back elsewhere to focus on expansion in China and India. The news agency has eliminated roughly 3,000 jobs in the past four years as part of a restructuring program.