- May 14, 2007
Cerberus buying Chrysler for $7.4 billion
According to the NYT, Cerberus will take an 80.1-percent chunk of Chrysler, while DCX holds on to the remaining 19.9-percent. That fifth of the company will be held under a new company called Chrysler Holding LLC and privately owned – a first for a Detroit automaker. Additionally, Chrysler will be bought as a debt-free entity, with the new owners only being responsible for the $18 billion in health care liabilities and pension.
DCX's shareholders and the board have approved the sale, with UAW head Ron Gettelfinger saying that this is in the "best interests of our UAW members, the Chrysler group and Daimler." That last part, "Daimler" is only part of the company's new name; it will now simply be known as Daimler AG.
Details of the financial breakdown include Cerberus' investment of $5 billion in the automaker itself, while a little over $1 billion will go towards Chrysler's financial wing. $1.45 billion will go to Daimler directly, although its expected that the now freed automaker will reinvest $600 million back into Chrysler.
The entire deal is expected to close by the third quarter of this year. In the meantime, watch this space for more.
[Source: New York Times]