Ally Financial Cancels $2.65 Billion CardWorks Acquisition

Ally Financial announced on Wednesday that it has terminated the acquisition and merger deal of CardWorks set for $2.65 billion.

The decision was taken due to the ongoing market fluctuations and economic stress caused by the COVID-19 pandemic. None of the parties will be liable for any termination or break-up fees as the termination of the deal was agreed upon mutually.

“Given the unprecedented economic and market conditions resulting from the COVID-19 global pandemic, Don Berman and I, along with our boards of directors, believe it is in the best interests of our customers and stakeholders to terminate the agreement,” Jeffrey J. Brown, CEO at Ally Financials, said.

“This was a difficult decision to make following a long process to bring two strong companies together. I want to express my deep appreciation for the considerable efforts and incredible commitment demonstrated by Ally and CardWorks employees.”

A major deal in the financial industry

CardWorks is a major credit card issuer targeting the “non-prime” customers. It has $4.7 billion in assets and $2.9 billion in deposits, the company disclosed during the original merger report.

Upon the set terms, Ally would have paid $1.35 billion in cash and $1.30 billion in common stock, or 39.5 million shares for CardWorks.

If the Acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term and merger deal went through, that would have further diversified Ally’s financial product offerings with both secured and unsecured products. The deal would also have resulted in the merger of Merrick Bank, a wholly-owned subsidiary of CardWorks, into Ally Bank.

“Ally's long-term strategic priorities remain intact, rooted in a relentless focus on our customers. Our industry-leading businesses and robust capital and Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term positions will enable us to continue serving as a source of strength during these uncertain times for all of our customers,” Brown added.