Ally Financial Launches $3 Billion IPO

Ally Financial Inc. aims to raise as much as $3 billion in an initial public offering that will help the U.S. government reduce its stake in the financial company.

The IPO will offer 95 million shares, currently held by the U.S. Dept. of the Treasury, at a price of $25-$28. The sale will reduce the government's stake in Ally to 17% from 37% currently.

The Treasury Dept. also is granting underwriters a 30-day option to sell an additional 14.5 million shares.

Ally is the former GMAC financial subsidiary of pre-bankruptcy General Motors Corp. GM sold 51% of the unit to Cerberus Capital Management and other investors in 2006. The Treasury Dept. became Ally's 74% owner in 2009 after lending the company $17.2 billion in federal bailout money.

The U.S. has since reduced its stake to 37% and recouped about $15.3 billion of its investment, according to Bloomberg News. The Treasury Dept. says it intends to sell another 95 million shares and lower its holding to 17% as part of the IPO.

GM sold its remaining 8.5% stake in Ally in December. The carmaker also has acquired Ally's operations in Europe and Latin America and merged them into its new GM Financial subsidiary.