Monday, Jul 25, 2016
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Automotive

Canadian firm considering buying Chrysler, analyst says

DETROIT Canadian auto parts supplier Magna International Inc. has been seriously considering the potential purchase of DaimlerChrysler AG s Chrysler Group, an analyst said yesterday, citing unnamed sources.

Magna executives have visited all of Chrysler s properties and have obtained access to Chrysler s financial information, Brett Hoselton of KeyBanc Capital Markets in Cleveland, wrote in a note to investors yesterday.

He said Magna is exploring a combined bid with a private-equity group to reduce the amount debt that would be required in a Chrysler purchase. But he said he does not believe the two companies will merge.

Magna, of Aurora, Ont., Canada s largest auto-parts maker, builds Mercedes, Jeep, and Chrysler models for DaimlerChrysler at a plant in Graz, Austria.

Magna declined to comment. Anything to do with the Chrysler rumors we are not commenting on, said Tracy Fuerst, a Magna spokesman.

She declined to confirm a report in Saturday s Detroit Free Press that Frank Stronach, Magna s chairman, met with DaimlerChrysler Chief Executive Officer Dieter Zetsche on Feb. 14, the day the company announced it wouldn t rule out selling the unit.

DaimlerChrysler said this month that it is keeping all options open for its North America unit and has been working with investment bank J.P. Morgan Chase & Co. to prepare a detailed sales prospectus.

Sources have said General Motors Corp. has been talking to Chrysler about an outright purchase or an alliance.

The Financial Times, of London, reported yesterday that DaimlerChrysler is considering taking a stake in GM in exchange for the Chrysler unit.

Meanwhile, Russia s second-biggest automotive company, OAO Gaz Group, denied a report in the German weekly magazine Focus that it is interested in acquiring Chrysler.

Gaz buys four-cylinder engines from Chrysler for the Russian company s cars and minivans.

Also yesterday, people briefed on the issued said that Chrysler is negotiating to expand its relationship with China s Chery Automobile Co. to include auto parts and a wider range of car models.

The discussions, which include parts such as transmissions, are at an advanced stage, the people said.

Chrysler lost $1.48 billion last year and is cutting 13,000 jobs and closing an assembly plant in Delaware as part of a plan to return to profitability by 2008.

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