Cerberus Buys Chrysler At A $30B Discount

Cerberus Capital is buying Chrysler back from the Germans for $7.4 billion. After spending $37 billion to buy the American carmaker, then billions more trying to keep it afloat, Daimler gets to keep all of Chrysler’s debts. (At least, they get to write them off against activities at Mercedes and other going business concerns.) The big she-daddy problem that is Chrysler’s billion-dollar pension nightmare will be spun off into a separate holding company, called Chrysler Holding.

And Cerberus — the three-headed dog who guards the gates of Hades — gets to keep the car company. Cerberus now owns the Chrysler, Dodge and Jeep makes, and Chrysler Financial. They just bought GMAC financing, the only part of GMC worth a spit. And they’re looking at the 2005 bankruptcy Oscar winner, Delphi.

Look for Cerberus to come out strong next year with a new and improved debt-free global automaker for sale… and a fistful of performance fees stuffed into its own pockets.

Addison Wiggin

Addison Wiggin

Editorial director of Markets and Money, Addison Wiggin is also the author, with Bill Bonner, of the international bestseller Financial Reckoning Day and a frequent guest on national US radio and television programs. Look for the sequel to Financial Reckoning Day, Empire of Debt (John Wiley & Sons) in October, 2005.

Addison Wiggin

Latest posts by Addison Wiggin (see all)

Leave a Reply

Be the First to Comment!

Notify of
Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to letters@marketsandmoney.com.au