Partial divestitures as an M&A alternative: The case of GMAC

In November 2006, General Motors completed the sale of 51 percent of its financial subsidiary, GMAC, to Cerberus Capital Management. Most observers assumed the sale was motivated by GM's need for cash. But perhaps other factors were much more important in the decision. This article looks at partial divestiture as a merger and acquisition (M&A) in the case of the GMAC sale. And it also points to the subprime loan crisis as an example of how an unanticipated event can destroy a well‐laid plan. © 2010 Wiley Periodicals, Inc.