Analysts say 50/50 chance for GM-Chrysler tie-up

General Motors stands a 50 percent chance of buying Chrysler, Jeep, and Dodge from DaimlerChrysler, according to Merrill Lynch analyst John Murphy, who said such a move would be a "defensive maneuver."





"Given the transformation the U.S. industry is beginning, we would not rule out a tie-up,'' Murphy said in a memo to investors today. "GM may view the acquisition as a defensive maneuver to box out new competition."

With Toyota's sales climbing, GM's "global volume lead is certainly in question," he said. "The acquisition of Chrysler would certainly allow GM to maintain its crown for many years to come."

Chrysler could add as much as $9 billion in value to GM due to products and "operating efficiencies including reduced research and development and advertising costs per vehicle," Jon Rogers, an analyst at Citigroup.

The UAW might also be more willing to make concessions if Chrysler is owned by an American company rather than a foreign one, Rogers said.