Report: Daimler mulls GM stake to pay for Chrysler group

Reuters / February 26, 2007 - 12:00 pm

LONDON (Reuters) -- DaimlerChrysler AG is considering taking a minority stake in General Motors as payment for the Chrysler group if a deal between the two automakers takes place, the Financial Times said today.

Such an all-share option was being weighed up by the firm, the newspaper said, citing people familiar with the situation.

Other possible options included a sale of DaimlerChrysler's struggling U.S. arm to private-equity or industry investors, and a flotation of the Chrysler group, according to the newspaper.

"They are interested in who takes Chrysler over and they would be happy to take equity in GM in return," the newspaper quoted an unnamed leading shareholder as saying. The shareholder was citing talks with DaimlerChrysler's senior managers, it said.

Chrysler group CEO Tom LaSorda told employees last week it might take months before questions about a possible sale of the unit could be answered.

Sources familiar with the situation told Reuters earlier this month that GM had conducted preliminary talks with Chrysler aimed at an acquisition or a strategic alliance.

DaimlerChrysler declined comment on the newspaper report.