Are GM and Chrysler Closer to a Merger?
New developments spur more speculation on a Chrysler deal.
Oct. 17, 2008 — -- Chrysler may be close to surmounting a stumbling block to a merger with General Motors or another automaker.
Cerberus Capital Management, which owns a majority stake in Chrysler, is nearing a deal to buy out Daimler AG, which owns nearly one-fifth of the beleaguered American car company, Reuters has reported.
Before Cerberus can work out any merger deal, the private equity firm must have full ownership of Chrysler, said Aaron Bragman, a research analyst for the economic analysis firm Global Insight in Detroit.
"Daimler has said they don't want to be a part of a merger deal," he said. "It's a procedural issue where [Cerberus has] to get the remaining part" of Chrysler.
At this point, Bragman said, "it's a foregone conclusion" that Cerberus wants to sell Chrysler.
Cerberus did not immediately return calls for comment. Daimler and Chrysler declined to comment today on the progress of the talks.
While neither GM nor Chrysler has confirmed that they have entered into merger talks, buzz has continued to build about the potential combination of the two ailing auto giants.
Both GM, the U.S. largest auto company, and French automaker Renault have reportedly expressed interest in Chrysler, though a Renault spokeswoman told ABCNews.com today that Renault denied any discussions with Chrysler.
On Thursday, Chrysler chief executive Bob Nardelli said in an interview on CNBC that slumping auto sales have created "an environment for consolidation, where you can get synergies of productivity that will allow you to be more competitive not only here in the U.S. market but on a global basis."
Chrysler spokesman Ed Garsten cautioned observers not to read too much into Nardelli's comments.
Nardelli, he said, was alluding to "arrangements where companies work in cooperation for each other's benefit," such as Chrysler's recent agreements with fellow automakers Nissan and Volkswagen. Chrysler is building pickup trucks for Nissan, while the Japanese automaker is assembling a compact car for Chrysler. Chrysler has also built a minivan for Volkswagen.
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