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If Magna Takes Chrysler, Benz is a “Fat Turkey”

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While pocket protectors from supplier Magna and hedge funds Cerberus and Blackstone crawled all up into Chrysler Group’s underwear this past week and read their labels, one thing became apparent to everyone involved—including unions on both sides of the Atlantic.

If there’s a mega-divorce in the works, count on a takeover bid for Mercedes-Benz soon after.

It’s simple economics, our Joe Szczesny reports this week over at TheCarConnection. While Magna will have access to information about Chrysler’s and Mercedes’ purchasing deals, the financial groups will be able to see exactly how much money Mercedes-Benz is capable of making on its own, if Chrysler were shorn off its haunches. And since DaimlerChrysler's representatives reportedly have coughed up plenty of inside information to satisfy the tire kickers, it might already be evident as Chrysler outwardly tries to cut costs and turn a corner it might never reach.

If Chrysler is spun off or sold, Szczesny adds, Mercedes-Benz itself could become an inviting target for private equity funds. A reborn Daimler-Benz presumably won't have the kind of pension and healthcare liabilities that has made American automakers financially radioactive.

“Shorn of Chrysler,” Joe says, “Mercedes-Benz and its big truck group could wind up looking like a couple of fat turkeys primed for a hedge-fund Thanksgiving.”

Anyone for takeovers leftovers?

Daimler-Benz: Future Takeover Target?
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Comment (1)
  1. How does a 36 billion dollar corporation only worth 4 to 5 billion dollar? all i can say is if Chrysler survives the crap and become's healthy again i hope it's chrysler that swollow's daimler and clean its cash reserve's just like Daimler did to Chrysler only to Throw out the corps.
    Long live Chrysler, damn you Daimler.
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