Magna's Stronach sees deal on Chrysler over next few weeks

05.10.07, 2:23 PM ETOTTAWA (AFX) - Canadian auto parts firm Magna International is hoping 'over the next few weeks' to announce an agreement to buy Chrysler, the loss-making US unit of DaimlerChrysler AG, Magna chairman Frank Stronach said.

Magna, which has teamed up with Toronto-based investment giant Onex Corp, has been reported to be readying a 5 bln usd offer for 80 pct of Chrysler. The Canadian firm also today obtained a big investment from a Russian group.

Under the plan believed to be in the works, DaimlerChrysler (nyse: DCX - news - people ) would retain a 20 pct stake in the Detroit-based carmaker.

'Well, of course we have an interest in Chrysler for the simple reason we have thousands of jobs involved,' the Austrian-born Stronach told public broadcaster CBC.

'Over the next few weeks, we hope that we can play a constructive involvement in the future of Chrysler,' he said. 'We do not like to compete with our customers, so we would not have a majority in there.'

DaimlerChrysler is one of Magna's largest customer, purchasing almost 25 pct of its annual sales, while unit Chrysler accounts for 15 pct of Magna's sales.

'We have teamed up with Onex. We have a financial partner and financially we have a very viable concept. We have major banks which are lined up,' Stronach told the Globe and Mail.

But Chrysler, which is in the midst of chopping 13,000 jobs and closing plants in North America as part of a restructuring move, could expect more cost-cutting measures under Magna's stewardship, Stronach said.

'Sometimes when you're sick, you've got to take some drastic measures and that's unfortunate,' Stronach said of Chrysler. 'What do we have to do to create a healthy patient?'

Earlier today, Russian metals firm Basic Element, owned by oligarch Oleg Deripaska, announced it will buy a stake in Magna for 1.54 bln usd (1.13 bln eur).

Separately, Magna reported a first-quarter profit of 218 mln usd, up 2.8 pct from a year ago, on revenues of 6.4 bln usd.