Ally to Sell Canadian Auto Lending Unit to RBC

Ally Financial Inc., the former GMAC Inc., has agreed to sell its Canadian operations to Royal Bank of Canada in a deal valued at $4.1 billion.

The Toronto, Ont.-based bank intends to combine the Ally Credit Canada Ltd. auto loan unit with its own automotive finance operations. That would make RBC Canada's largest auto lender with about $24 billion in dealer inventory financing and consumer car loans.

RBC has reached an agreement with General Motors Co.'s Canadian unit to provide loans to buyers of GM vehicles at low interest rates subsidized by the carmaker.

Ally is shedding its international units to repay its U.S. government bailout loan and focus on its American banking and auto lending businesses.

GM is vying to acquire Ally's operations in Europe and Latin America. The finance company says it expects to disclose its plans for those units next month.