| DaimlerChrysler AG's sale of its American | | | | Secrecy was a principal concern. On the fifth |
| luxury division Chrysler Group for $7.4 | | | | of March, Cerberus senior executive Lenard |
| billion would mark an epic event in the | | | | Tessler and his aides arrived at the Walter |
| evolution of the global auto realm. Though | | | | P. Chrysler Museum. They were then shuttled |
| the transaction is construed as the end of a | | | | to Chrysler's "design dome," which has been |
| great international merger, investors showed | | | | transformed into a virtual showroom. |
| enthusiasm to bet billions on the ailing | | | | |
| company with an uncertain future. | | | | Eventually, Cerberus trumped the powerful |
| | | | rivals to win the bidding for the ailing |
| On February 14 last year, the bomb of selling | | | | American division of Daimler. Cerberus was |
| Chrysler exploded. "No option is being | | | | willing to invest billions into Chrysler's |
| excluded," said Dieter Zetsche Chairman and | | | | operations and assume all of its union |
| CEO of Daimler. He added, "In the interest of | | | | liabilities. "Cerberus came forward and said, |
| arriving at the best possible solution for | | | | we really like this business (and) we hear |
| the Chrysler Group and DaimlerChrysler as a | | | | all your requirements," said one source close |
| whole." Zetsche evaded dozens of queries | | | | to Daimler. When Cerberus approved to a |
| about the potential sale of Chrysler nine | | | | mid-May deadline, the deal was all but |
| years after it was acquired by Daimler-Benz. | | | | clinched. |
| "Please understand that we cannot provide you | | | | |
| with any more details at this point," he | | | | On May 12, Tom LaSorda, Chrysler CEO, flew to |
| said. | | | | Stuttgart with Ron Gettelfinger, the chief of |
| | | | the United Auto Workers union. Gettelfinger |
| The decision seemed abrupt, almost bizarre. | | | | had opposed the sale of Chrysler from the |
| But in reality, Daimler had been preparing | | | | very beginning. But after meeting with |
| for the moment for weeks. The German | | | | LaSorda and Zetsche, he agreed to support |
| automaker had hired investment bank J.P. | | | | Cerberus as the new owner of Chrysler. |
| Morgan Chase & Co. to examine its options for | | | | |
| Chrysler. Larry Slaughter, a senior executive | | | | On May 14 in Stuttgart, Zetsche announced the |
| in the firm's London office who had | | | | "solution" to a nine-year marriage that was |
| negotiated previous deals for Daimler, led | | | | beyond repair. For $7.4 billion, Cerberus |
| the project. Inside Daimler, chief strategist | | | | would acquire 80.1 percent of Chrysler and |
| Rüdiger Grube was tapped as the Daimler's | | | | relieve Daimler of all responsibility for its |
| point man on the deal. | | | | former American partner. "With this |
| | | | transaction," Zetsche said, "we have created |
| Over the next ninety days, Daimler engaged in | | | | the right conditions for a new start for |
| a whirlwind auction played out in secret | | | | Chrysler and Daimler." |
| meetings in Auburn Hills, New York, London | | | | |
| and Stuttgart. Chrysler suitors include the | | | | Cerberus Chairman John Snow vowed that his |
| Blackstone Group, Cerberus and Kohlberg, | | | | firm would offer a "good home" for Chrysler. |
| Kravis, Roberts & Co., General Motors Corp., | | | | "We believe in Chrysler," he said. After the |
| and Magna International Inc. | | | | announcement, Zetsche flew to Auburn Hills |
| | | | for one final meeting at Chrysler. In a |
| The German automaker had no interest in an | | | | poignant "town hall" gathering, the German |
| exposed bidding battle. Instead, Zetsche | | | | executive said his goodbyes to the troops in |
| instructed J.P. Morgan to choose bidders with | | | | Auburn Hills. |
| the financial means and capability to do a | | | | |
| deal quickly and decisively. "The three | | | | Like the repair manuals, Cerberus will aid |
| criteria were value, speed and certainty," | | | | Chrysler to patch up the mistakes in the |
| said one person familiar with the process. | | | | past. Chrysler is counting on its turnaround |
| "Daimler wanted to move very fast on this." | | | | plan to return to profitability. |
| | | | |