The Financial Times is reporting DaimlerChrysler is considering swapping its North American Chrysler unit for a stake in GM. DaimlerChrysler is anxious to unload Chrysler after it reported losses of $1.5 billion last year versus gains of $7.3 at the parent company. Such an arrangement would be advantageous to cash-strapped GM, in the midst of its own turnaround, especially given its current 'junk' debt rating. Meanwhile DaimlerChrysler would stand to benefit as a minority shareholder from cost savings from the multi billion-dollar merger. It has been reported that at least two of DaimlerChrysler's institutional shareholders like the idea of an all-equity deal.
Sources: Financial Times.com, Reuters
Commentary: Large Private Equity Firms Approached About Buying Chrysler • GM To Buy Chrysler? At Least It Hasn't Been Ruled Out • Renault CFO: 'We Want No Part in Chrysler'
Stocks/ETFs to watch: DaimlerChrysler (DCX), General Motors (NYSE:GM). Competitors: Nissan (OTCPK:NSANY), Ford (NYSE:F), Toyota (NYSE:TM), Honda (NYSE:HMC), Volkswagen (OTCQX:VLKAY)
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