Corporate Breakup
September 25, 2008
Daimler said on Wednesday, Sept. 24, that it was in talks with Cerberus Capital Management regarding the redemption of its remaining 19.9 percent stake in Chrysler.
Private-equity investor Cerberus already owns the other 80.1 percent of Chrysler.
A Daimler spokesman in New York declined to give further details, DPA news agency reported.
Talks in advanced stage
The news first broke in Germany's Manager Magazin and the trade publication Automobilwoche.
Automobilwoche, citing a Daimler spokesman in New York, said talks between the parties were in an advanced stage and could be completed in the coming weeks.
Chrysler responded with a statement saying that the talks were initiated by Cerebus and that the two companies "are currently in discussions."
"In the event of a successful transaction, common projects between Daimler and Chrysler in the areas of research and development and advanced technologies would continue," the Chrysler statement added.
Exiting a troubled marriage
Daimler, previously known as DaimlerChrysler, sold its majority stake in Chrysler to Cerberus in August 2007 after a troubled nine-year marriage.
The cost of the sale knocked 2.2 billion euros ($3.2 billion) off Daimler's 2007 results and the German automaker said its remaining stake in Chrysler resulted in a loss of 864 million euros in the first half of 2008.
Chrysler has seen a sharp decline in sales in recent months amid an economic slowdown in its home market and a shift away from its lineup of gasoline guzzling trucks and sport utility vehicles.