Report Says Chrysler Deal May Be at Hand

Associated Press 04.17.07, 7:27 AM ET

Magna International Inc., a Canadian auto parts maker, is in advanced talks with DaimlerChrysler AG about a possible purchase of the money-losing Chrysler unit, a German newspaper reported Tuesday.

The Frankfurter Allgemeine Zeitung reported that the Aurora, Ontario-based company is in continuing talks with the German-American automaker about acquiring a majority stake in the Chrysler division, but the paper did not name its sources. The paper said DaimlerChrysler (nyse: DCX - news - people ) would keep a minority stake in the U.S. division.

DaimlerChrysler did not comment on the report.

Since DaimlerChrysler announced on Feb. 14 that it was considering all options for its troubled U.S. unit, speculation has mounted that private equity groups would likely make a deal for the division. Magna International (nyse: MGA - news - people ) chief Frank Stronach told Canada's Globe and Mail newspaper last week his company was in talks with the Onex Corp. conglomerate about teaming up on a bid.

Billionaire investor Kirk Kerkorian, who tried to take control of Chrysler in the 1990s, has made a $4.5 billion bid. DaimlerChrysler, however, has been reported to be in meetings with other private equity firms - including Cerberus Capital Management LP and a consortium of investors led by Blackstone Group - but apparently has not set up a similar meeting with Kerkorian's Tracinda Corp.

Shares of DaimlerChrysler were down nearly half a percent to $82.19 in Frankfurt trading Tuesday.