Interested firms have now started emerging as frontrunners to bid for Chrysler, the struggling U.S. unit of German automaker DaimlerChrysler AG. According to the reports, Magna International Inc., Cerberus Capital Management LLC and a team led by Blackstone Group and Centerbridge Partners LP are frontrunners to buy DaimlerChrysler AG’s Chrysler unit. However, private equity firms Blackstone Group and Cerberus Capital Management have been speculated as the leading contenders to buy the Chrysler Group.
In the mean time, Cerberus Capital Management has signed an advisory contract with Wolfgang Bernhard, the restructuring expert who helped to turn around Chrysler five years back. This move is likely to strengthening the private equity group’s hand in the bidding for the US carmaker significantly.
Magna, a Canadian auto-parts manufacturer, and the leveraged- buyout firms have started examining automaker’s finances and product plans. DaimlerChrysler executives plan to meet within the next few weeks to pick a favored bidder for the U.S. division, which lost $1.5 billion last year.
Daimler has collected initial expressions of interest from several other private equity funds after it announced that ‘all options’ were being considered for its loss-making US unit in mid-February. General Motors has considered the possibility of co-operation with Chrysler and Magna International, the Canadian auto parts and assembly company, has expressed interest in the potential sale.
However, with potential investors like Cerberus and the Blackstone Group becoming increasingly interested in Chrysler, some bankers concerned in the process think that a sale to private equity is likelier than to a competitor.
