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Regulators OK Cerberus-Chrysler Deal

From The Associated Press| June 20,2007

Federal antitrust regulators have cleared Cerberus Capital Management's $7.4 billion purchase of Chrysler. Peter Duda, a Cerberus spokesman, said Tuesday that the Federal Trade Commission made its decision before the end of a standard 30-day review.

Early termination of an FTC review typically signifies there will be no conditions placed on the deal. The FTC declined to comment Tuesday.

DaimlerChrysler agreed last month to transfer an 80.1 percent stake in its money-losing Chrysler unit to New York-based Cerberus.

As part of the deal, Cerberus agreed to invest $6.1 billion in Chrysler and its financing arm and to pay DaimlerChrysler $1.4 billion. DaimlerChrysler would remain liable for certain expenses that could result in it paying Cerberus up to $1.5 billion to complete the transaction.

Cerberus, however, has agreed to take on $19 billion of the auto company's long-term retiree health care costs.

The companies expect to close the deal in the third quarter, Duda said. Daimler's board approved the transaction last month.

The Chrysler purchase expands Cerberus' automotive holdings, which include a 51 percent stake in GMAC Financial Services. It also owns Guilford Mills, the largest automotive seating supplier in the U.S., and Peguform Group, a German-based manufacturer of interior and exterior plastic parts used in autos.

Shares of DaimlerChrysler dropped 9 cents to $92.28 in after-hours trading, after increasing 22 cents to close at $92.37 in the regular trading session Tuesday.

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