GM Reaches Agreement to Sell Controlling Stake in GMAC Tuesday, April 04, 2006

April 3, 2006 General Motors GM Communications media.gm.com   GM Reaches Agreement to Sell Controlling Stake in GMAC Cerberus Led Consortium To Buy 51 Percent Of GMAC Equity GM To Receive $14 Billion In Cash Over Three-Year Period DETROIT - General Motors Corp. (NYSE: GM) today announced it has entered into a definitive agreement to sell a 51-percent controlling interest in General Motors Acceptance Corp. (GMAC) to a consortium of investors led by Cerberus Capital Management, L.P., a private investment firm, and including Citigroup Inc., and Aozora Bank Ltd. GM expects to receive approximately $14 billion in cash from this transaction over three years, including distributions from GMAC, with an estimated $10 billion by closing.   The transaction strengthens GMAC’s ability to support GM’s automotive operations, improves GMAC’s access to cost-effective funding, provides significant liquidity to GM and allows GM to continue to participate in the profitability of GMAC over the long term through its 49-percent ownership stake. “We look forward to working with Cerberus to maintain and grow GMAC’s traditional strong performance and contribution to the GM family,” said GM Chairman and Chief Executive Officer Rick Wagoner. “This agreement is another important milestone in the turnaround of General Motors. It creates a stronger GMAC while preserving the mutually  beneficial relationship between GM and GMAC. At the same time, it provides significant liquidity to support our North American turnaround plan, finance future GM growth initiatives, strengthen our balance sheet and fund other corporate priorities.   “Over the last nine months we have been aggressively implementing our North American turnaround plan,” Wagoner said. “We’ve made some big moves, such as the health-care agreement with the United Auto Workers union; the manufacturing capacity plan; changes to our salaried health-care and pension plans; an accelerated attrition plan for hourly employees; and a complete overhaul of our marketing strategy. These bold initiatives are designed to immediately improve our competitiveness and position GM for long-term success and today’s transition is a further step in that direction.”   The GM Board of Directors approved the sale in a special meeting on Sunday which followed extensive consideration of this transaction and alternative strategies over the past several months. Speaking for the GM Board, Presiding Director George Fisher stated, “This transaction along with the other progress GM has been making on its turnaround plan, is an important milestone. While there is still much work to be done, the GM Board has great confidence in Rick Wagoner, his management team and the plan they are implementing to restore the company to profitability.”   The transaction is subject to a number of U.S. and international regulatory and other approvals. The companies expect to close the transaction in the fourth quarter of 2006.