In February, Reuters reported that Chrysler was putting together a prospectus for potential buyers of the company. Today, Bloomberg reports that Dieter Zetsche has admitted to working on a sale of Chrysler Group.
Zetsche wouldn't say who the bidders were, but they are supposed to include private equity firms Blackstone Group LP, Centerbridge Capital Partners LLC, and Cerberus Capital Management LLC. Magna International, Inc., the Canadian company that supplies DCX, GM, Ford, VW, and BMW, among others, is also known to be among the potential buyers. While all options are on the table, this won't be a fire sale: DCX wants $8 billion for Chrysler – a substantial reduction from the $36 billion dollar takeover – as well as a plan any buyer for "sustainable" profitability, employee considerations, and making Chrysler competitive. With those demands, and new contract negotiations looming with the UAW, a quick sale is not a foregone conclusion.
In spite of Zetsche forecasting "significantly" increased profitability over the next two years and with 20 new vehicles to be unveiled from now until 2009, after last year's $1.5 billion loss and a 3.2 percent reduction in market share since the 1998 "merger," shareholders have had enough. DaimlerChrysler expects to select a sole negotiating partner by the end of April.
[Source: Bloomberg]
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