On the backdrop of a global financial crisis and dwindling auto sales, General Motors and Chrysler are said to be strongly considering a merger. Talks between GM and Chrysler parent company Cerberus Capital Management began in secret over a month ago, according to a new report by the New York Times.
Sources told the newspaper the odds of a merger happening are about “50-50.” The final terms of such a deal have not yet been established, and a decision is still weeks away. The talks have involved the “most senior executives” of both companies, according to the report.
Under the preliminary arrangement, Chrysler would be absorbed by GM, and Cerberus would take a minority stake in the auto giant. It’s unclear how Chrysler’s brands and products would be integrated into GM’s already complex mix.
The upside to such a deal would include combining dealer networks, cutting jobs, and merging R&D projects.
Insiders say Cerberus is determined to make a deal with another automaker, and if the GM deal falls through, it will likely turn to Nissan and Renault.
Stay tuned — this story is likely to develop rapidly in the coming days.
