Cerberus Buys Majority Stake in DaimlerChrysler

Private equity firm Cerberus Capital Management is purchasing a controlling stake in the Chrysler division of DaimlerChrysler, which is selling 80 percent of the Chrysler Group for $7.4 billion. The financial genius' at Daimler purchased Chrysler for $36 billion in 1998.

The following is a summary of the deal from DaimlerChrysler.com:

• Affiliate of Cerberus to acquire 80.1% equity interest in new company Chrysler Holding LLC; DaimlerChrysler AG to retain 19.9%
• Obligations for pensions and healthcare costs to be retained by Chrysler companies
• Transaction expected to result in net cash outflow of EUR 0.5 billion for DaimlerChrysler
• DaimlerChrysler’s net profit according to IFRS in 2007 to be reduced in a range of EUR 3-4 billion
• Equity ratio of DaimlerChrysler’s industrial business is expected to be over 40% by the beginning of 2008
• Extraordinary Shareholders’ Meeting to decide on change of name to Daimler AG
• DaimlerChrysler CEO Dieter Zetsche on the realignment of DaimlerChrysler AG: "We will be the leading manufacturer of premium vehicles and a provider of premium services in every market segment we serve worldwide."
• UAW President Ron Gettelfinger: "The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler."
• Cerberus Capital Management Chairman John Snow: "Cerberus believes in the inherent strength of U.S. manufacturing and of the U.S. auto industry. Most importantly, we believe in Chrysler."

More info is available at DaimlerChrysler.com here.