The DaimlerChrysler Corporation has announced that the corporation is divesting itself of the Chrysler Group by selling it to New York City-based private equity firm Cerberus Capital Management for US$7.4 billion. The companies' names are announced to be changed to Daimler AG and Chrysler Holding LLC. DaimlerChrysler has sold 80.1% of its stake in Chrysler, retaining the other 19.9%, for joint ventures and other agreements and partnerships.
Cerberus has agreed to take on billions of dollars in pension and retiree health care costs at Chrysler. Cerberus also led a consortium that acquired the majority stake in April of last year in GMAC, the financing arm of GM, and is said to planning to invest in auto parts giant Delphi.
Buzz Hargrove, the president of Canadian Auto Workers said he had been assured that the collective bargaining agreement with Chrysler would remain and that jobs would not be eliminated.
The name change of the German company DaimlerChrysler to Daimler AG is pending shareholder approval at the next meeting, scheduled for fall 2007.
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DaimlerChrysler to sell Chrysler Group for $7.4 Billion