GM’s board cool to idea of Chrysler merger-report
October 13th, 2008 | by admin |NEW YORK, Oct 12 (Reuters) - The board of General MotorsCorp (GM.N: Quote, Profile, Research, Stock Buzz) gave a cool reception to the idea of acquiringChrysler LLC after GM’s top management discussed the matter ata meeting last week, The Wall Street Journal said on Sunday.
Chrysler’s majority owner, Cerberus Capital ManagementCBS.UL, has been in talks with GM about swapping Chrysler’sauto operations for GM’s 49-percent stake in finance arm GMAC,sources briefed on the matter have told Reuters. Cerberus ownsthe other 51-percent in GMAC.
The idea of acquiring Chrysler was discussed at a formal GMboard meeting last week, The Journal said on its Website,citing people familiar with the matter. The board also held acall on Friday, the report said.
GM has had preliminary talks with both Ford Motor Co(F.N: Quote, Profile, Research, Stock Buzz)and Chrysler LLC in recent months about the potential formergers, people familiar with the talks have said, as thepunishing downturn in auto sales forces all three companies torethink their businesses.
GM’s talks with Ford broke off, and Chrysler’s negotiationsgot hung up on the question of how much value the automaker hadlost while owned by private equity fund Cerberus Capital.
Cerberus owns an 81-percent stake in Chrysler and is intalks with German automaker Daimler AG (DAIGn.DE: Quote, Profile, Research, Stock Buzz) to buy outthe remaining 19 percent. (Reporting by Jui Chakravorty Das; 646-223-6000)
