DaimlerChrysler CEO considers selling Chrysler, report says

Feb 14, 2007, 10:39 GMT

Berlin - DaimlerChrysler CEO Dieter Zetsche is considering the radical step of selling the company's Chrysler division, reports said Wednesday.

Zetsche has asked a US investment bank to examine possible options for the German-American company amid an expected billion-dollar-loss suffered by Chrysler last year.

'Anything is possible ... and it is considerably more likely that something drastic will happen than nothing at all,' said an unnamed company source quoted in the German business daily Handelsblatt.

The Frankfurter Allgemeine newspaper also reported that the sale of Chrysler was being pondered.

DaimlerChrysler was created in 1998 by the merger of Germany's Daimler-Benz and the US Chrysler Corporation. The company produces cars, SUVs and trucks including Mercedes-Benz, Chrysler, Dodge, Jeep, Smart, and the luxury Maybach.

Zetsche headed Chrysler from 2000 to 2005 and cut 40,000 jobs at the company. He returned to Germany to take the helm of DaimlerChrysler in 2006.

Among possibilities being considered are the complete sale of Chrysler; keeping Chrysler but splitting it off from Daimler and listing it separately on the New York Stock Exchange; and selling off part of Chrysler's shares to another carmaker, said Handelsblatt.

Analysts welcomed reported moves to reduce the company's role in Chrysler.

'It would be an interesting step which would increase the number of options for Daimler,' said Hypo-Vereinsbank automotive analyst Georg Stuerzer

Michael Raab of Bankhaus Sal. Oppenheim said an complete sale of Chrysler was unlikely because of the high cost of a divorce.

Raab said selling off Chrysler could cost Daimler up to 26 billion euros (34 billion dollars) because the company would have to take over entitlements for the company's employees.

Shares of DaimlerChrysler rose by almost 2 per cent to 50.18 euros in early trading on Wednesday.