Cerberus to take over full ownership of GMAC?

Cerberus Capital Management LP, which purchased 51 percent of GMAC from GM in 2006 for $14.1 billion while also owning Chrysler Financial Services after purchasing Chrysler last year from Daimler AG for $7.4 billion, has been rumored to possibly eying full ownership of GMAC, prompting talks that the Big Three may be on its way to being the Big two.

Likely? Maybe. A good move? That's still up for debate.

Sources close to these preliminary talks said that Cerberus wanted to acquire the remainder of the GMAC mortgage and auto loan unit that it already controls and shed Chrysler's automotive operations. That wouldn't be a terrible move to back out of the auto making portion of things, but merging the two giants may be more than it is bargaining for (literally). "There could be a lot of cost reduction from servicing the two loan operations with one back office," said John Casesa, managing partner of Casesa Shapiro Group. He said Cerberus wanted to combine the two but GM had resisted, preferring to have GMAC dedicated to its own auto business.

A deal with Chrysler would not address GM's pressing need to raise capital it critically needs either. On the skeptical side, acquiring Chrysler's automotive operations would compound GM's problem of having more brands and dealers which is already an issue; If GM ends up with Chrysler's automotive operations, it would face UAW scrutiny if it tried to shed jobs and plants as well.

So, what's the story, morning glory? Obviously the winner in this type of merger would be Cerberus, but who else? That is quite a scary question to consumers.

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