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US firm buys ailing Chrysler

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US firm buys ailing Chrysler


It was billed as an automobile marriage made in heaven but now DaimlerChrysler has announced details of a split. The third party is US buyout firm Cerberus Capital Management, which is to take a majority stake in the group’s struggling American arm Chrysler. Cerberus will pay five and a half billion euros for just over 80 percent of the car-maker.

DaimlerChrysler boss Dieter Zetsche was one of the architects of the original 1998 buyout, in which Germany’s Daimler-Benz paid around 26 billion euros for Chrysler. It was one of the biggest transatlantic deals ever.

But the American firm is now in the process of cutting 13,000 US jobs. Last year it lost 500 million euros as well as market share. One key to the transaction is Cerberus’ experience in the automobile industry- last year it led a consortium which bought a majority stake in the financing arm of General Motors.

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