As of about 7 AM EST, DaimlerChrysler has agreed to sell it’s struggling Chrysler arm (or at least 80.1% of it) to Cerberus for $7.4 billion.
This is obviously no secret, since DaimlerChrysler has been shopping Chrysler to folks for a few months now. What is interesting is that the deal went to Cerberus, and not Magna (which has a Russian financial interest) and billionaire Kirk Kerkorian.
The New York Times article bring up a few interesting points:
Of the $7.4 billion, Cerberus agreed to invest $5 billion in the new Chrysler and $1.05 billion in Chrysler’s financial arm. The remaining $1.35 billion will go to DaimlerChrysler.
DaimlerChrysler’s share of the capital represents a remarkable comedown for a company that paid $36 billion to acquire Chrysler in 1998, in a landmark deal that was initially hailed as a blueprint for the future of the global auto industry.
You read that right. DaimlerChrysler paid $36 billion and sold it for $7.4 billion. Nice investment there, Dr. Z. The New York Times article also had another quote that made me spit coffee out my nose:
The chairman of Cerberus, John W. Snow, said, “We would like to thank DaimlerChrysler for their good stewardship of this American icon over the last decade. We are aware that Chrysler faces significant challenges, but we are confident that they can and will be overcome.” Mr. Snow is the former United States treasury secretary.
That’s some good stewardship, alright.