May 14, 2007
AP Reports That Chrysler has been sol.
Article Excerpt:Cerberus to Buy 80 Percent of Chrysler
By Matt Moore and Tom Krisher, AP Business WritersCerberus to Pay $7.4 Billion to DaimlerChrysler for 80.1 Percent of Chrysler
FRANKFURT, Germany (AP) -- DaimlerChrysler AG said Monday it will sell 80.1 percent of its money-losing Chrysler Group to private equity firm Cerberus Capital Management LP for $7.4 billion, unwinding a troubled 1998 combination aimed at creating a global leader.
The deal is a stunning reversal of the $36 billion takeover of Chrysler by Daimler-Benz AG that tried to set the mold for global automotive manufacturers. It also represents a huge bet for Cerberus, which has agreed to take on billions of dollars in pension and retiree health care costs at Chrysler.
"We're confident that we've found the solution that will create the greatest overall value -- both for Daimler and Chrysler," said Chief Executive Dieter Zetsche, who oversaw Chrysler before becoming DaimlerChrysler CEO in 2006. "With this transaction, we have created the right conditions for a new start for Chrysler and Daimler."
Shareholders reacted positively, sending DaimlerChrysler's shares up more than 7 percent after the deal was announced, before settling back at 64.04 euros ($86.36) for a gain of 5.6 percent.
Zetsche 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 in a statement. "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........MORE HERE
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5/14/2007 09:10:00 AM
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