Lexus to buy Pinnacle Financial
Lexus will buy Pivot Financial, a subsidiary of the Pinnacle Group, in a $6.9bn deal, the company said.
The transaction is subject to regulatory approval and closing in the second half of 2017, the firm said in a statement.
Lexus is the world’s biggest automaker, with more than 5.4m cars on sale worldwide.
Pivot will provide financial services, marketing and operational expertise for Lexus, Lexus CEO Peter Kollwitz said.
Lexis has previously sold the business to its sister company, Lexmark Financial.
Pinnacle has an annual turnover of about $2bn.
In the United States, Pinnacle and Lexus share an annual revenue of $9.9 billion.
Lexas shares rose 1.2% to $2.13.
Shares of Pinnacle were up 1.5% at $3.38.
Pivotal shares fell 1.1% to close at $0.75.
Lexamark Financial was up 0.9% to 1,024.70.
The deal comes as the company continues to struggle in the US, with its stock plunging by more than 50% over the past 12 months.
The company reported a loss of $5.4bn last year, the biggest in its history.
Lexes shares have been in free fall since the end of last year.
Lexmark has also been hammered by a series of scandals involving the handling of millions of dollars in funds.
Piva has been accused of running a “pump and dump” business, with some of the money going to an investment firm linked to former prime minister Joe Hockey, who has previously denied any wrongdoing.
The Australian Financial Review reported that the Pivotas board of directors has been secretly discussing the sale of the business for years.
The board of trustees is due to meet next month.
The sale is the latest in a string of moves by Lexus.
Earlier this month, it paid $1.9b for the global assets of Pivot.
Last year, it bought the business of Pivul Financial Group for $3bn.
The acquisition of Piva and Lexmark is part of a broader $2 billion investment in the company.
Lexias chief financial officer, Mark Kolluth, told reporters last month that Pivod is a “key partner” for the company, which employs more than 400 people in the UK and Australia.
Lexa is also set to spend $2b this year to improve its financial services infrastructure.
It will also expand its research arm, which focuses on the automotive technology industry.