GM looking to buy Chrysler, according to Detroit News

A breaking story in the Detroit News reports that Cerberus has been discussing a sale of Chrysler to General Motors, in exchange for the remainder of GMAC, for around a month. The New York Times carried the first report of these talks last week. The deal would most likely not be affected by General Motors’ low share price, which fell to around $5 per share – less than one third their value before the credit crisis, and well below GM’s one year high of over $40 per share.

While the combined company might require less capital to produce needed vehicles, and would bring additional electric-vehicle patents and technology to General Motors, it might not avoid the basic problem of insufficient capital for both companies.