Citigroup analyst: GM a contender

Private Chrysler is likely

March 23, 2007

BY JEFF GREEN and JEFF BENNETT | BLOOMBERG NEWS

DaimlerChrysler AG's Chrysler Group most likely will be sold to a private-equity firm if the German automaker dismantles its 1998 merger, Citigroup analyst Jon Rogers said.

"Private-equity buyers appear the front runner for Chrysler, but GM should not be ruled out as an acquirer," Rogers wrote in a report summarizing a Citigroup call with customers Wednesday to discuss Chrysler's future.

General Motors Corp., the world's largest automaker, can extract significant synergies, Rogers said. The UAW also may be more willing to offer concessions to GM than an overseas buyer or financial firm, he said.

DaimlerChrysler CEO Dieter Zetsche announced five weeks ago that all options are being considered for the money-losing Chrysler unit. Its CEO, Tom LaSorda, told dealers Wednesday that a decision on a sale may come soon, according to Jim Arrigo, a dealer who attended a meeting with LaSorda in Florida.

Auto-parts supplier Magna International Inc., Cerberus Capital Management LLC and a team led by Blackstone Group and Centerbridge Partners LP are front-runners to buy Chrysler, two people familiar with the talks said last week.

In addition, GM is discussing several options with Chrysler, including joint development of vehicles and an outright purchase.