GPWizard F1 Forum
Everything Else => General Automotive => Topic started by: davewilson on May 15, 2007, 05:19:56 AM
-
DaimlerChrysler AG will sell 80.1 percent of its money-losing Chrysler Group to private equity firm Cerberus Capital Management LP for $7.4 billion, the company announced Monday, undoing a 1998 merger aimed at creating a global auto giant.
The German-American automaker said in a statement that an affiliate of Cerberus will hold the majority stake in a new Chrysler Holding LLC while DaimlerChrysler will keep a 19.9 percent stake.
It said that Chrysler would keep its heavy obligations for pensions and health care costs, a key issue complicating DaimlerChrysler's effort to sell the division.
The first thing to go will be the company name, with Daimler AG to replace DaimlerChrysler. A vote by shareholders to approve the change must be held first, likely this fall, the company said.
"We're confident that we've found the solution that will create the greatest overall value both for Daimler and Chrysler," said DaimlerChrysler Chief Executive Dieter Zetsche, who oversaw Chrysler before becoming CEO in 2006. "With this transaction, we have created the right conditions for a new start for Chrysler and Daimler."
He added that the two companies would still work together, particularly on existing conventional and alternative drive systems, purchasing, sales and financial services outside North America.
"We very much look forward to our continued cooperation as business partners, as we want to continue to reap the mutual benefits of working together," Zetsche said. "That's one of the reasons why we're retaining a 19.9 percent equity position in Chrysler."
DaimlerChrysler said the deal is likely to be complete by the third quarter and that it would reduce its overall profit by some $4.05 billion to $5.39 billion for 2007.
The prospect of a sale to a private equity firm had worried unions in the United States because of private equity firms' tendency to slash costs and jobs. But United Auto Workers President Ron Gettelfinger called it the best choice.
"The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler. We are pleased that this decision has been made," he said.
-
I heard about this on my way to the airport this morning. Sad to see Chrysler falling on such hard times. I think the one of the main reasons that DB aquired Chrysler in the first place was to get the Jeep brand. Oddly enough, that's why Chrysler got American Motors, why American Motors got Kiaser and why Kiaser got Willys.