Report: Chrysler May Be Auctioned Off

JPMorgan (JPM), the US investment bank advising on the future of Chrysler, will formally kick off a £7 billion (roughly $13 billion) auction by sending information memorandums to a number of potential suitors as early as this week, The Times has learned.

The bank is to release data that include private information on Chrysler, such as figures on its current trading.

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It is also understood that a number of interested bidders started basic due diligence on Chrysler weeks before DaimlerChrysler (DCX), its parent company, said that all options for its US car firm were being considered.

General Motors (GM) is already in preliminary talks with DaimlerChrysler about an acquisition of all or part of Chrysler but is particularly interested in its Jeep and Dodge marques.

It is also thought that Hyundai, the Korean car manufacturer, is interested in joining potential bidders. Hyundai is said to be interested in securing access to Chrysler’s lucrative dealer network.

A DaimlerChrysler spokesman would only reiterate chairman Dieter Zetsche’s comments last week that nothing was being excluded in an attempt to find “the best solution” for Chrysler.

Dr. Zetsche is cutting 13,000 jobs in America, along with 15 percent of the dealerships in an effort to revive the US giant.

A takeover by Hyundai, which makes cars under its own brand and controls Kia, would be a major achievement for American business and for the struggling Motown.

Chrysler has recently broken ground by opening two factories in Europe and North America and hopes to become one of the world’s five biggest car manufacturers. It currently sits in seventh place.

Hyundai already has a link with Chrysler through a three-way engine alliance with Mitsubishi and a deal would be in line with the ambitions of the chairman, Chung Mong-Koo.

China’s two carmaking powerhouses, Chery and SAIC, are also thought to be eyeing developments. SAIC failed in an attempt to buy MG Rover two years ago.

Banking sources close to events said last night that talks between DaimlerChrysler and potential bidders for Chrysler were at an early stage.

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