Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

A Member of the Law Professor Blogs Network

Tuesday, May 15, 2007

More on Chrysler-Cerberus Deal

Cerberus' acquisition of an 80.1% interest in Chrysler is being called a "watershed" event.  It provides further evidence that there is no limit to private equity's power to take over a business.  Stocks of Ford and GM rose yesterday, in the hope that if Cerberus can work out with the unions a solution to Chrysler's $18 billion liability for pension and health-care benefits, then the other auto makers will be able to do the same.  There is also the irony of Chrysler Daimler's paying $677 million in cash to get rid of a company that it bought nine years ago for $36 billion.  “We obviously overestimated the potential of synergies,” said Chrysler Daimler's CEO Zetsche.  For a sampling of the stories, see NYTimes, A Corporate Divorce on the Cheap and In Deal, a Test for the U.A.W.; WSJ, Chrysler Deal Heralds New Direction for Detroit.   

http://lawprofessors.typepad.com/securities/2007/05/more_on_chrysle.html

News Stories | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef00d8354ff18469e2

Listed below are links to weblogs that reference More on Chrysler-Cerberus Deal:

Comments

Post a comment