Sale of Chrysler will cost DCX $673m
If it seems like Daimler lost out huge, take the following into consideration. First, the Benz boys rid themselves of over $18 billion in future pension costs, which is a monumental amount of money for any company to have hanging around their neck. Second, Daimler retains 19% ownership of the Chrysler Group, which means Daimler can continue to achieve economies of scale on technologies like diesel engines. Third, and perhaps most importantly, DCX stock spikes have catapulted the market value of the German automaker by a staggering $27.7 billion.
Of course Cerberus basically got a free, multinational corporation whose assets are probably still worth more than its considerable liabilities. Plus, a looming showdown with the UAW could result in some relief from the monumental legacy costs that scared off Daimler in the first place. We're with the Detroit News on this one, it looks like a win for both companies. Now lets hope that Cerberus knows some designers that know how to make good-looking interiors.
[Source: Detroit News]
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