Associates To Buy Avco for $3.9B

Associates First Capital Corp., Irving, Tex., has agreed to buy Avco Financial from Textron Inc. for $3.9 billion in cash.Associates, the largest residential subprime lender/servicer in the U.S., is buying Avco to help expand its international business, which includes Canada, Australia, the U.K., New Zealand, France, and other countries. Avco, with $8.9 billion of assets and 2.5 million customers, has 1,265 consumer finance offices worldwide and has the fourth-largest consumer branch network in the U.S. No information was available about Avco's role (if any) in the residential subprime market. Other interested bidders in Avco include G.E. Capital Corp. and Norwest Corp. (Last year Norwest was eyeing United Companies, Baton Rouge, which is currently on the auction block.) At noon today Associates' shares were down $2 to $72 and change.