According to the FT, DaimlerChrysler (DCX) might take equity in GM (GM) if the large US company buys it smaller rival. 24/7 Wall St. has estimated Chrysler’s value at under $7 billion. GM’s market cap is just over $19 billion.
The move could be smart for both companies. It would save GM cash which it may need to rebuild its North American operations, and may also need to cover one time charges for cost cuts at Chrysler.
For Daimler, a sale to GM would offer a fairly quick exit from its US business, an operation that hurts the German parent’s margins and is not popular with a number of its institutional shareholders.
A rare "win/win" for a US car company. Maybe.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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