Daimler to shed Chrysler for $7.4 billion

DaimlerChrysler would become Daimler AG under a deal announced Monday, May 14, to sell 80.1 percent of the Chrysler Group to New York-based private equity firm Cerberus Capital Management, L.P. for $7.4 billion — a fraction of the $36 billion Daimler paid for Chrysler in the 1990s.

Under the deal, DaimlerChrysler will transfer the industrial business of the Chrysler Group completely free of debt. On the other hand, the new company, Chrysler Holding LLC, will be fully obliged for pensions and healthcare costs — one of the major worries for DaimlerChrysler.

Daimler AG will continue to collaborate with Chrysler on some projects, and joint commercial offerings will continue. For example, Dodge and Freightliner will, at least for now, both continue to offer the Sprinter van, says Randy Jones, spokesman for DaimlerChrysler’s U.S. commercial van operations. The Dodge Ram 4500 and 5500 Chassis Cabs and the Sterling Bullet also will continue to share the same platform.

Freightliner and its affiliated companies were part of the Daimler Benz group before the Chrysler purchase and therefore are not directly affected.