AutoCanada signs deal with GM Canada over dealerships
Automotive dealership company AutoCanada has announced the signing of a new deal with General Motors (GM) Canada that permits AutoCanada to have direct ownership and control of GM Canada dealerships.
GM Canada had previously prohibited the outright ownership of its dealerships by publicly traded companies, however, this will change with the new deal.
AutoCanada also reached an agreement with CanadaOne Auto Group as part of a three-way deal. This dictates that the Edmonton-based company will obtain control of five of the nine GM dealerships where it held a majority equity stake, despite having previously had no voting rights, with CanadaOne buying interest into the remaining four dealerships.
Under the terms of the agreement, the General Manager in each dealership will be required to own a minority stake in the specific unit in question.
As a result of this, Patrick Priestner, the owner of CanadaOne and former CEO and founder of AutoCanada, will pay AutoCanada $23mn as part of the agreement.
The deal is expected to close 2 January 2018, subject to GM Canada’s final approval of the transactions.