Autocar - First for car news and reviews

Chrysler may abandon its GM merger plans and sell a stake to Renault-Nissan, according to reports from America.

The Detroit News reports that Cerberus Capital Management, which owns 80 per cent of Chrysler, has received the proposal from the French-Japanese partnership for a 20 per cent share of the company, but is thought to still favour a deal with GM.

A Renault-Nissan stake in Chrysler was first proposed in 2006, when Kirk Kerkorian was Chrysler's largest shareholder.

Ha...Read the full article

 This would be full circle for Renault. They bought American Motors Corp which produced, among others, Jeep. They ran it as Renault North America for a while then sold it to Chrysler.

You have this wrong Autocar. Cerberus already owns GMAC through a 51% controlling stake.

This is an excellent write up of the current state of play on the financial side by the Wall Street Journal:

http://online.wsj.com/article/SB122471276128660107.html?mod=googlenews_wsj

I think the deal Autocar are refering to would be for GM (who owns the other 49% of GMAC) to swap those shares for the Cerberus holding in Chrysler. At the end of the process this deal would have no benefit that I can see - Chrysler have a cash pile but GM is burning cash faster than Chrysler, all that it would do is to burn Chrysler's cash faster and both companies would fail (or have to be nationalised?).

Yes, I think the point is that the deal could involve GM handing over the remaining 49 per cent (ie a non-controlling half) stake in GMAC in exchange for Chrysler, allowing Cerberus to step away from the car making business.