cerberus capital management

Daimler has already admitted that its 19.9% share in Chrysler is worth absolutely zero as far as its corporate balance sheets are concerned, but that's not stopping Cerberus from going after that remaining bit as it tries to become the sole owner of the beleaguered American automaker. Without full control of Chrysler, Cerberus would have a tough time offloading it in either one lump deal or in smaller, bit-by-bit transactions. But it sounds like Chrysler's majority owner isn't making life easy for Daimler, accusing the German entity of providing incomplete information about Chrysler and prolonging the actual sale that took place late in 2007. As you'd expect, Daimler is denying these accusations completely and is claiming that Cerberus is making outlandish demands to take the rest of the company off its German hands.

So, just what is a 19.9% stake in America's third largest automaker worth? Um, nothing. So says Daimler, which owns exactly that amount. The German company claims that, for accounting purposes at least, there is absolutely no value in its part-ownership of Chrysler. Just about a year ago, Daimler estimated that its share of Chrysler was worth some $1.17 billion. The remaining 80.1% was sold to Cerberus Capital Management last August for $7.4 billion.

It's been a crazy few days as news broke that Chrysler and General Motors have been in talks to combine operations. It turns out that there's a pretty significant back-story to these proceedings, and it involves Cerberus Capital Management's possible desire to shed its car-building operations and acquire the rest of GMAC, of which it already holds a controlling stake of 51%, with GM holding holding the other 49%. According to reports, Cerberus would like to combine Chrysler Financial with GMAC, which would allow it to merge the offices of the two financial institutions and reduce costs. All right, that might make some sense, but what about merging the two automakers?