Thursday, May 17, 2007
Cerberus Acquires Chrysler: Dog, 3 Heads, Snake Tails
Cerberus is a three-headed hound from Hell, in Greek mythology. Cerberus Capital Management is a private equity firm that has just purchased Daimler-Chrysler. The Greek Cerberus hound also has a snake for a tail. Wall Street Cerberus has three tales too: 1) 80.1% stake in Chrysler Group from Daimler-Chrysler, 2) Chrysler lending arm - Chrysler Financial, which already owns 51% of GMAC Financial Services - the former financing arm of General Motors Corp, and 3) 11% market share in auto loans.
Oh yeah - the purchase price was $7.4 billion. The price for Daimler to divorce Chrysler was $677 in cash and shedding $18 billion in health and pension liabilities. Now Daimler is Damiler again, and as in many divorces they probably wish they had never bought Chrysler. And the really big questions: Will this lead to a car that people want to buy that will reduce our dependence on imported oil and reduce smog and global warming.