For months there have been rumors and internal statements about the possible sale of Chrysler, which would result in the end of the current relationship with Daimler-Benz. The partnership that was announced in 1998 has now come to an end. Cerberus Capital Management has won the bid to take over the Chrysler group for $7.45 billion.
Under the new agreement Cerberus will own 80.1 percent of Chrysler and Daimler will retain 19.9 percent of the automaker.
Here are the details according to Automotive News:
-New company formed — Chrysler Holding LLC.
-Cerberus Capital Management owns 80.1 percent of Chrysler Holding, Daimler AG owns 19.9 percent.
-Cerberus pays $7.45 billion but most goes to Chrysler Holding. By paying debt, Daimler has net cash payout of $650 million.
-Chrysler Holding owns 100 percent of Chrysler Corp. LLC
-Chrysler Corp. is the maker and seller of cars and trucks, and controls Chrysler Financial Services LLC finance arm. It also holds all the pension and health care liabilities.
-Tom LaSorda remains as CEO of Chrysler Corp. Eric Ridenour is COO.
-Wolfgang Bernhard, an adviser to Cerberus, will not be part of Chrysler management.
-UAW chief Ron Gettelfinger supports the deal.
-Deal is expected to close in third quarter.
Chrysler is now the first privately held automaker out of the big three.
It is going to be interesting to see what changes are going to be made and what will happen to the models that share parts with Mercedes-Benz.
Full Story: Automotive News