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| Version 1 | Version 2 |
|---|---|
| Cerberus to buy Chrysler majority | Cerberus to buy Chrysler majority |
| (about 1 hour later) | |
| US private equity firm Cerberus Capital Management is to buy a majority stake in car firm DaimlerChrysler's ailing US Chrysler arm. | US private equity firm Cerberus Capital Management is to buy a majority stake in car firm DaimlerChrysler's ailing US Chrysler arm. |
| The group is to buy 80.1% of the firm for 5.5bn euros ($7.41bn; £3.7bn) DaimlerChrysler announced on Monday. | The group is to buy 80.1% of the firm for 5.5bn euros ($7.41bn; £3.7bn) DaimlerChrysler announced on Monday. |
| News of the deal drove DaimlerChrysler shares 7% higher on the German market. | News of the deal drove DaimlerChrysler shares 7% higher on the German market. |
| Under the deal - which will see the German-American firm retain a 19.9% stake - Chrysler will still have to meet pension and healthcare costs. | Under the deal - which will see the German-American firm retain a 19.9% stake - Chrysler will still have to meet pension and healthcare costs. |
| 'Right conditions' | |
| The deal was sealed after two months of talks between an array of potential bidders interested in buying the US operation. | |
| We have created the right conditions for a new start for Chrysler and Daimler Dieter Zetsche, chief executive DaimlerChrysler | |
| The future of Chrysler has been in the balance recently as it battled against huge losses that hit $1.5bn last year. | |
| "With this transaction, we have created the right conditions for a new start for Chrysler and Daimler," said DaimlerChrysler chairman and chief executive Dieter Zetsche. | |
| The acquisition comes nearly a decade after the $36bn merger of Chrysler and the former DaimlerBenz AG. | |
| Along with other US car firms, Chrysler has suffered from falling profits and increased competition from Japanese car firms - slumping to fourth place in the US light vehicle market behind Toyota. | |
| Like its US peers, the group has also embarked on a significant reorganisation plan, which includes 13,000 job cuts. | |
| Tom LaSorda, president and chief executive of Chrysler Group said the transaction would create a "standalone Chrysler that is financially stronger". | |
| Worker worries | |
| Unions - who had been worried over job implications of any sale - welcomed the deal. | |
| Ron Gettelfinger, president of the United Autoworkers, said: "The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler." | Ron Gettelfinger, president of the United Autoworkers, said: "The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler." |
| The UAW has a four-year contract with Chrysler that comes to and end in September. | |
| The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler Ron Gettelfinger, president, United Autoworkers | |
| Analysts have said that making the firm profitable will demand that any new contract with the UAW includes lower costs, notably in health care. | |
| Experts also said the deal illustrates the continued interest of Cerberus in the auto industry. | |
| In 2006, GM offloaded a majority share in its finance arm, General Motors Acceptance (GMAC) , for some $14bn to a group that was headed by Cerberus. | |
| Analysts believe the private equity firm might be considering merging the GMAC outfit with Chrysler Financial. |