Chrysler and GM to merge?

I’m a little behind on this one.  You’ll have to forgive me.  According to the AP, GM and Chrysler have been talking about a possible merge.  I hope everyone had a nice long weekend.

DETROIT (AP) — General Motors Corp., Chrysler LLC and Cerberus Capital Management LP have held preliminary talks about a merger or an acquisition of Chrysler by GM, according to a person familiar with the talks.

Chrysler, which is 80.1 percent owned by Cerberus, already has a joint venture with GM making a hybrid gas-electric powertrain, and has discussed a full merger or acquisition with GM, said the person, who did not want to be identified because the talks have not been made public.

The Wall Street Journal, citing people it described as familiar with the discussions, reported that Cerberus, a private equity firm that also owns 51 percent of GMAC Financial Services, proposed trading Chrysler’s automotive operations to GM in exchange for GM’s remaining 49 percent stake in GMAC.

The New York Times, also citing people familiar with the talks, reported that the automakers were discussing a merger.

GMAC, primarily an auto lender, also has significant mortgage lending operations that have been hit hard by the crisis in that industry.

The talks have stalled because of the recent turmoil in the financial markets, according to the Journal. Its sources said negotiations could resume if markets stabilize because both GM and Cerberus want to quickly divest the assets under discussion.

The negotiations between 100-year-old GM and 83-year-old Chrysler have began more than a month ago. The Times said its sources pegged the chances of a merger being completed at “50-50.”

Read the full story here.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: