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Cerberus to likely buyer of Chrysler

Private equity firm Cerberus Capital Management appeared to be the winning bidder for the Chrysler Group and an announcement on the deal could come Monday, according to a report released by The Wall Street Journal website on Sunday.

DaimlerChrysler AG would get a substantial payment for the transaction, and unload Chrysler's $18 billion pension and health care liability off of its balance sheet, the report quoted people familiar with the matter as saying. Chrysler Chief Executive Tom LaSorda would continue to run the company while former Chrysler chief operating officer and Cerberus Capital Management adviser Wolfgang Bernhard would not have an executive role, but could have a board seat, said the report.

Daimler would contribute Chrysler into a new corporation while keeping a minority stake in the business. Chrysler's $18 billion in pension and health-care liabilities would travel along with the rest of the company. The new company would be majority owned by the new buyer. This party would then contribute a big slug of equity to fund the operations, according to the report. The Chrysler posted a $1.5 billion loss in 2006 after turning a profit in 2005. DaimlerChrysler announced in February that it will consider „all options” to turn around the unprofitable operation. (