German carmaker DaimlerChrysler has agreed to sell a majority stake in its Chrysler division for €5.5 billion (£3.8 billion).
Private equity firm Cerberus Capital Management (CCM) will acquire an 80.1 per cent stake of the faltering Michigan-based firm, with DaimlerChrysler retaining a 19.9 per cent interest.
As part of the deal, Chrysler's debts will be alleviated and CCM will be responsible for healthcare and pensions provision.
"We're confident that we've found the solution that will create the greatest overall value – both for Daimler and Chrysler," said DaimlerChrysler chief executive officer Dieter Zetsche said.
"With this transaction, we have created the right conditions for a new start for Chrysler and Daimler."
And CCM chairman John Snow commented: "Cerberus believes in the inherent strength of US manufacturing and of the US auto industry. Most importantly, we believe in Chrysler."
Mercedes-Benz manufacturer Daimler merged with Chrysler in 1998, but efforts have been made in the past to unwind the merger after stateside losses.
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