Chrysler Seriously Considers Lowball Offer from Canadian Firm

Chrysler Seriously Considers Lowball Offer from Canadian Firm

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When Daimler-Benz purchased the Chrysler Group in 1998, it cost them $36 billion. What Canadian auto parts supplier Magna International and a private-equity partner have offered is just $4.7 billion, or about 13% of the original purchase price. The scary thing is that DaimlerChrysler either is or should be seriously considering this offer. This is because some industry experts value the company at nothing, because their liabilities outweigh their assets. On the high-end, other pundits are reporting a value of as much as $13 billion, but even that is about 1/3 of what Daimler paid in the first place.

The Chrysler Group remains on the auction block for the time being, but it seems that this news of a possible acquisition by Magna has gone over well with investors: shares in DaimlerChrysler hit a 52-week high late last week. This isn’t because they hope Chrysler will be revitalized; it’s because Daimler will benefit from dumping their struggling American arm.

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