Cerberus Gets the Nod From Daimlerhttp://www.fool.com/investing/general/2007/05/14/cerberus-gets-the-nod-from-daimler.aspx Matt Koppenheffer
May 14, 2007
The nightmare in Stuttgart that began in 1998 for DaimlerChrysler (NYSE: DCX ) -- or should we just say Daimler? -- may be coming to an end. The company announced today that it is selling an 80.1% stake in Chrysler to private equity firm Cerberus.
Unfortunately, with a nightmare like this, it's tough to expect the German parent to just rub its eyes, say "Gott sei Dank!" and be done with it -- especially when it's retaining nearly 20% of the company.
According to the DaimlerChrysler filings, Cerberus will pay $7.4 billion for its majority stake in Chrysler. Of that $7.4 billion, though, roughly $5 billion will go directly into the newly formed Chrysler Corporation -- the industrial arm that will actually make the cars -- and $1.1 billion will be put into Chrysler Financial Services in order to strengthen the financial position of the respective units.
DaimlerChrysler will get the remaining $1.3 billion, but once you net out a $400 million loan it's giving to the Chrysler industria