Associates First Capital Corp., the largest independent consumer lender in the nation, agreed Tuesday to buy Textron Inc.’s Avco Financial Services unit for $3.9 billion in cash, accelerating its overseas expansion and adding branches.
Irving-based Associates said it’s buying Avco for its international business, which will allow it to move into new markets and expand in Australia, New Zealand, Canada and the U.K.
After the transaction, Associates, which was spun off by Ford Motor Co. earlier this year, will enter Hong Kong, France, Spain, Ireland, India, Sweden and re-enter Australia and New Zealand after a 10-year absence.
Avco, with $8.9 billion of assets and 2.5 million customers, has 1,265 consumer-finance offices worldwide and the fourth-largest branch network in the United States.
Associates said it expects to cut expenses by $200 million by the fourth quarter of 1999, at which time the purchase will add to the company’s earnings.
Textron, based in Providence, R.I., expects the sale to generate after-tax proceeds of about $2.9 billion.
