Nissan looks for stake in Chrysler as GM looks for outside cash
Alternatives to a Chrysler-GM merger are arising as the proposal is meeting resistance from the investment community. Cerberus and General Motors don’t have enough cash to make the deal work. One analyst says the merger would need an additional $10 billion or more to make it work and notes there is still a significant risk.
The Detroit News reports Nissan is looking to acquire a 20 percent stake in Chrysler, bringing it into the Nissan-Renault Alliance, one of the most successful automotive tie-ups in recent years. Nissan already has joint projects, including a new small car and a full-size pickup with Chrysler. Nissan, which has cash to spend, would make the deal because Renault already has $5 billion in debt.
On the GM side, the Financial Times says the world’s largest automaker is looking for a cash infusion from outside major investors, a deal similar to Warren Buffett’s recent investments in General Electric and Goldman Sachs.
A source says Cerberus and General Motors have approached at least one major investor to put money into the venture, but their efforts were met with what the source describes as “a great degree of apprehension.” The two automakers have also considered approaching the federal government for a loan to fund the merger.
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