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WASHINGTON (Reuters) - General Motors is in preliminary talks about a possible merger with fellow U.S. automaker Chrysler, The New York Times reported late on Friday.
The talks between GM and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago and are not certain to produce a deal, the paper said.
The Wall Street Journal reported on Friday night that the merger talks had been suspended because of financial market turmoil.
The Times said two people close to the process said the chances of a merger were "50-50" as of Friday and would most likely still take weeks to work out.
A merger would drastically reshape the ailing U.S. auto industry, reducing the Big Three of Detroit to the Big Two.
GM shares have fallen to near a 60-year low on fears the global financial crisis could derail turnaround plans.
GM and Detroit's other automaker, Ford Motor Co both ruled out on Friday seeking bankruptcy protection.
GM shares fell as low as $4 early on Friday, the lowest price for the stock since 1949, but recovered and ended up 13 cents, or 2.7 percent higher, at $4.89 on the New York Stock Exchange
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From reading on other sites, it looks like it would be one huge public car company and one investment group:
Private equity firm Cerberus Capital Management owns Chrysler. Calls and e-mails into GM and Cerberus were not immediately returned.
The Journal reported that Cerberus proposed selling GM all of Chrysler's automotive operations, in exchange for GM selling Cerberus its remaining 49% stake in GMAC.
There are a multitude of logistical, legal and financial hurtles that a merger between two of Detroit’s Big Three would have to go through for a merger to make financial sense.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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