Cerberus to buy the rest of Chrysler from Daimler?

Recently, several reports showed up, pointing out that Daimler is looking to sell it’s remaining 19.9 stake in Chrysler. While there are offers from several companies, Daimler is currently negotiating with Cerberus Capital Management LP, who, after paying $7.2 billion for 80.1 percent from Chrysler, is currently looking to buy the rest of the remaining stock. The reason Cerberus wants to buy Daimler’s share is because it would allow them to be independent from the German company, without having to ask for permission for entering joint ventures, partnerships or even an outright sale, plus that Daimler would no longer disclose any financial information about Chrysler, which it now is required to do.

The negotiations were confirmed by both companies. “We can confirm that we are in talks with Cerberus regarding the redemption of our 19.9 percent interest in Chrysler,” Daimler spokesman Han Tjan told The Detroit News, while Cerberus spokesman Peter Duda said that the company he’s representing “approached Daimler about the possible redemption of its 19.9 percent stake in Chrysler. We are currently in discussions.” Both companies announced that if the sale goes through, that doesn’t mean they’ll drop their joint projects, such as diesel engines.

While Daimler valued its Chrysler holding at 916 million Euros ($1.34 billion) at the end of 2007, after the loss Chrysler registered this year, the valued went down to about 171 million Euros ($250 million) at the end of June. Chrysler was bought by Daimler in 1998, for $36 billion, in a move that shook the entire auto industry and created one of the most powerful companies, DaimlerChrysler. However, things didn’t work out as good as Daimler was hoping, the Auburn Hills carmaker losing $1.6 billion last year. In August, Daimler sold 80.1 percent of its Chrysler share to Cerberus Capital Management for $7.2 billion.

Source: The Detroit News