To our Surprise – Cerebus Purchases Chrysler For $7.4 Billion USD

May 16, 2007 by Malcolm
Filed under Automotive News, Chrysler, Dodge, Jeep, Mercedes Benz

Just yesterday morning the board of management at DaimlerChrysler announced approval for the sale of Chrysler Group. This coming in now is the big surprise that some didn’t really put all together. In thinking that the buyer would be Magna International, everyone was really sure that they all everything in place for the purchase and would go forward with it.

To our surprise

New York’s Cerebus Capital Management L.P. Cerebus paid over $7.4 billion for an 80.1-percent stake in the automaker and all together consists of the Chrysler, Dodge and Jeep brands. The German portion, of half, will remain in the big picture as a minority share holder of the company assuming about 19.9% and then in return the name will be “Chrysler Holding LLC”. For the name “DaimlerChrysler”, it will be divided 50/50 with Mercedes-Benz, and the Smart portion of the company will be under the name “Daimler AG”. Cerebus will assume Chrysler as a debt-free entity with the large exception of the 18-billion pension and liability fund.

Not set it stone yet, but all signings and final paper work are to take place the 3rd quarter of this year. The effects with Magna being a supplier for Chrysler Group and the European maker have yet to be seen.

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