Chrysler Gets Bought for $7.4 Billion!
It took a while for this sale to finally materialize, and private equity firm Cerberus has come out on top. Cerberus has agreed to buy the money-losing Chrysler (DCX) for $7.4 Billion.
The stake Cerberus will have in the company comes out to 80.1% exactly, which is a huge risk to take on a company that has struggled so much over the years. The biggest problem the firm faces are the billions in pension and retiree heath care costs at Chrysler. There will be a lot of talks done with the United Auto Workers, or the UAW, in the future.
John Snow, who is the Chairman of Cerberus Capital Management LP said, “We think at this particular point in Chrysler’s history, there may be
opportunities in the private world, the world of private investment,
that create more room for growth and expansion, that allow management
to focus with greater intensity on the day-to-day business of producing
better cars.”
The stock has reacted positively to the news, and is up thus far today over 2 points or about 3%, trading around $84.50.
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