Ally Financial Inc. (NYSE:ALLY) entered into a definitive agreement to acquire Fair Square Financial Holdings LLC for $750 million on October 21, 2021. Under the terms of agreement, Ally paying consideration in all-cash. Ally Financial deployed 25% of excess capital above internal target to fund strategic acquisition of Fair Square. The transaction was unanimously approved by Ally's Board of Directors and is expected to close by the end of the first quarter 2022. The transaction does not impact Ally's previously announced $2 billion share repurchase authorization and is expected to consume approximately 50-55 bps of CET1 i.e. around 1/4 of our excess capital. Ally expects the transaction to further enhance profitability and risk-adjusted returns. Acquisition of Fair Square is accretive to Ally's attractive and structurally enhanced long term return profile, enhancing strong earnings & EPS accretive to financial year 2023. The transaction is also accretive to core ROTCE of 100-125 bps (2022-2023) and > 150 bps accretive (medium term).

Citi served as lead financial advisor, Goldman Sachs & Co. LLC also served as a financial advisor and Sullivan & Cromwell LLP served as legal counsel to Ally. The Sullivan & Cromwell LLP team on the transaction includes C. Andrew Gerlach, Mitchell S. Eitel, Tiffany D. Wooley, Mehdi Ansari and S. Eric Wang. J.P. Morgan served as exclusive financial advisor and Sven Mickisch, Matthew Nemeroff, Brian Christiansen, Bao Nguyen, Shalom Huber and Jessica Hough of Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Fair Square Financial.

Ally Financial Inc. (NYSE:ALLY) completed the acquisition of Fair Square Financial Holdings LLC for approximately $740 million on December 1, 2021.