Munich, Germany - Private equity group Cerberus Capital Management will take control of the Chrysler group in a transaction valued at $7450 million.
DaimlerChrysler AG announced the deal, in which an affiliate of Cerberus will acquire 80.1 percent of Chrysler, while DaimlerChrysler will retain 19.9 percent, on 15 May.
Most of the $7450 million outlay from Cerberus will go directly to the future new company, Chrysler Holding llc. Chrysler´s automotive business will get $5000 million, while the financial services business gets $1050 million. DaimlerChrysler will receive the balance of $1350 million. In addition, DaimlerChrysler will loan $400 million to the Chrysler automotive operation.
DaimlerChrysler will transfer the unit free of debt. Because of the cost of Chrysler´s restructuring plan, the transaction will result in a cash outflow of $1600 million for DaimlerChrysler.
DaimlerChrysler's net cash outflow resulting from the transaction will be $650 million.Chrysler's pension and health care obligations will be retained by the Chrysler companies.
Ron Gettelfinger, United Auto Workers president, said the transaction with Cerberus is in the best interests of UAW members, the Chrysler Group and Daimler.
Tom LaSorda, Chrysler Corp. ceo, said there are no new job cuts planned in connection with the transaction.
The transaction is expected to close during the third quarter of this year.
From Rubber & Plastics News, a Crain publication."
