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In a move that had been hinted at for weeks, DaimlerChrysler AG divested itself from the bulk of its investment in Chrysler, handing over an 80.1% share of the company to the New York-based private equity firm Cerberus Capital Management, according to a Bloomberg report.

Cerberus will invest $7.4 billion in a new venture called Chrysler Holding LLC, while Stuttgart, Germany-based DaimlerChrysler will contribute a net $650 million. Industry observers may recognize Cerberus as the same group that offered to invest $3.4 billion in bankrupt auto-parts maker Delphi Corp., a deal that Cerberus is expected to back out of, Bloomberg reports.

"The sale of Chrysler represents a significant milestone in the automotive industry,” notes Carl Sheffer, SEMA vice president, OEM relations. “Never before has an American automotive company been acquired by an investment company with the added caveat of taking the company private.

“It will be interesting to watch how this transaction will impact future product offerings, profitability, dealings with the UAW and dealings with other manufacturers as they move forward. At this time, I don't see any significant impact on the relationships currently in place with SEMA and many of our member companies.”