GM, Chrysler, Cerberus in talks of a possible merger

According to an unidentified person familiar with the talks, GM, Chrysler and Cerberus Capital Management are in talks about a possible merger or acquisition of Chrysler by GM. What does this exactly mean and how are all three companies already involved?

Cerberus, which owns 80.1 percent of Chrysler, also owns 51 percent of GMAC Financial services, GM’s financed arm. Chrysler and GM, who currently work together on making hybrid systems, have discussed a full merger or acquisition of Chrysler by GM. Cerberus in the mean time, is talking about increasing its stake in GMAC, buying the remaining 49 percent.

According to The New York Times, talks have been going on for more than a month and the chances of a merger or acquisition are at 50/50.

GM’s spokesman Tony Cervone has released a statement saying: “Without referencing this specific rumor, as we’ve often said, GM officials routinely discuss issues of mutual interest with other automakers.”

Chrysler has said that it is looking at a number of global partnerships for growth opportunities. “Beyond those partnerships already announced, however, Chrysler has not formed any new agreements and has no further announcements to make at this time.” Chrysler said in a statement released Friday night.

 

Source: CNNMoney