Wednesday, October 22, 2008
Reuters Reports:Nissan Wants 20 Percent Of Chrysler
TOKYO (Reuters) - Nissan Motor Co (7201.T: Quote, Profile, Research, Stock Buzz) is proposing to buy about 20 percent of Chrysler and bring the troubled U.S. automaker into the Franco-Japanese alliance with Renault SA (RENA.PA: Quote, Profile, Research, Stock Buzz), the Detroit News reported on Wednesday, citing sources familiar with the situation.
The offer is now before private equity firm Cerberus Capital Management CBS.UL, which holds 80 percent of Chrysler, the paper said. Citing another source close to the talks, the paper also said Cerberus founder and chief executive Stephen Feinberg still favors a deal with General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz).
Nissan declined to confirm or deny the report.
"This is more of the same noise and we have no comment to make on any of the recent speculations," Simon Sproule, head spokesman at Nissan, said.
GM, looking for a lifeline to replenish is depleted coffers, has been pushing ahead with talks to acquire Chrysler, people briefed on the talks have told Reuters. Although it does not report financial information, Cerberus has said Chrysler ended June with $11.7 billion in cash.
The Financial Times reported earlier, however, that GM was looking for a large investment from outside investors as a possible alternative to a deal with Chrysler.
Citing unnamed sources, Detroit News said Carlos Ghosn, chief executive of both Renault and Nissan, had sent a proposal in recent days that included revisions to a draft agreement prepared by Cerberus.
Since 2006, when Nissan and Renault studied a possible three-way link-up with GM, Ghosn has held to his position that a trans-continental alliance that includes North America would benefit the existing one. Since forming their equity tie-up in 1999, Nissan and Renault have enjoyed billions of dollars in cost savings every year.
Led by Executive Vice President Carlos Tavares, Nissan has held ongoing talks with Chrysler over the past year that have so far led to three separate projects for the mutual supply of vehicles under original equipment manufacturing (OEM) deals.
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