It's official: Cerberus gains control of Chrysler

DETROIT -- "After months of uncertainty, then a period of transition, we are beginning a new chapter in Chrysler's proud history — and we have the chance to write a terrific story," Chrysler CEO Tom LaSorda told employees in an e-mail.

The 82-year-old automaker's new status as a private company "means we can bring a laser-like focus to our business and make the long-term investments needed to compete, free from financial market pressures to generate short-term results," he said.

In May, DaimlerChrysler announced it would sell 80.1% of Chrysler to Cerberus, ending a nine-year marriage that failed to live up to expectations. Daimler will keep the rest.

The deal was heavily skewed in Cerberus' favor: Of the $7.1 billion it paid to DaimlerChrysler, $6.05 billion was reinvested in Chrysler. The remaining $1.35 billion came back to Cerberus when DaimlerChrysler paid off the automaker's debt.

DaimlerChrysler planned to sell that debt to outside investors, but couldn't. So the debt will remain on Daimler's books.

DaimlerChrysler is keeping its name until October, when it holds a special shareholder meeting to change its name back to Daimler.

Daimler CEO Dieter Zetsche said the automaker is returning to its focus on premium cars, like its Mercedes brand, and the new name "will both connect us to our past and signal the launch of a new era."

Daimler paid $36 billion for Chrysler in 1998, on hopes the two automakers together would save billions in production and manufacturing costs. But that never happened. Executives at Mercedes worked hard to keep operations separate, to prevent mass-market brand Chrysler from sullying Mercedes' image.

Cerberus, founded in 1992, is based in New York and is run by financier Stephen Feinberg. John Snow, Treasury secretary from 2003 to last June and former head of railroad CSX, was named chairman of Cerberus in October.