Word of the potential all-stock transaction filtered out of Europe over the weekend as industry analysts continued to question how to value Chrysler, which is in the process of yet another makeover and downsizing as it struggles to regain profitability.Meanwhile, Russian automaker GAZ became the latest firm to deny an interest in acquiring Chrysler from its German parent. GAZ was responding to a German press report over the weekend linking the two companies. So far, rumored bidders from China and India have kept quiet.
Since DaimlerChrysler announced more than a week ago that "all options are on the table" regarding the disposition of Chrysler, there has been intense media and industry speculation about the U.S. company's fate. Among the options said to be under discussion are a possible spin-off or a sale to one or more private-equity firms.
It is unclear what value, if any, ultimately will be assigned to Chrysler. The stock market values of its larger U.S. counterparts, Ford Motor Company and GM, are $15.6 billion and $19.5 billion, respectively.
DaimlerChrysler is said to be asking around $13 billion for Chrysler, but analysts suggest the U.S. company could be worth far less, especially in light of its heavy pension and health-care liabilities, which are said to total more than $16 billion. Published outside estimates of the company's value range from $5 billion to $10 billion.
Analysts note that the right buyer — perhaps one of China's larger state-owned manufacturers — might be willing to pay a premium to gain access to Chrysler's platform and powertrain technology, its brands and its North American dealer network.
Chrysler's potential value to GM seems far less evident. There is almost a complete product and brand overlap between the two companies, and GM certainly doesn't need Chrysler's powertrains, its plants or its unfunded pension and health-care liabilities.
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