GO
Loading...

Board Clears Way for Chrysler Sale

DaimlerChrysler's supervisory board on Wednesday formally cleared the way for the sale of most of the company's money-losing U.S. unit, Chrysler Group, to private equity firm Cerberus Capital Management.

The board, the equivalent of a U.S. board of directors, "today approved the concept for the Chrysler Group and the realignment of DaimlerChrysler AG in the form submitted by the board of management," DaimlerChrysler said in a statement.

It added that "the closing of the transaction is expected to take place in the third quarter," but gave no further details. It did not elaborate on the board meeting.

DaimlerChrysler announced on Monday its plan to sell 80.1 of Chrysler to Cerberus in a 5.5 billion euros ($7.45 billion) deal. The future Daimler AG will retain a 19.9 stake in Chrysler.

The deal unravels a $36 billion "merger of equals" between Daimler-Benz and Chrysler Corp. in 1998, an attempt to create a global automotive powerhouse.

The supervisory board's approval was essentially a formality after both German and North American labor unions earlier this week voiced support for the deal with Cerberus.

United Auto Workers President Ron Gettelfinger said Monday that he made a last-minute pitch to keep Chrysler with Daimler over the weekend but, when that failed, he decided to embrace the Cerberus purchase.

DaimlerChrysler shares rose 0.4% to 63.77 euros ($86.45). The company's U.S. traded shares soared $2.10, or 2.5%, to $86.90 in morning trading.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • Discussing reports that the iPhone 6 will not be available in China until 2015 and his outlook for Apple's stock, with Scott Kessler, S&P Capital IQ.

  • CNBC's David Faber speaks to SoftBank chairman & CEO Masayoshi Son, about his position in Alibaba and if his role will change once Alibaba goes public.

  • CNBC's Steve Liesman shares the results of the latest Fed Survey that shows what top economists really think of the myriad of geopolitical issues.