Hyundai Dismisses Reports Of Having Talks With Chrysler As GM Halts Merger

Detroit, MI (AHN) - Hyundai Motor Co. dismissed reports that it has been holding private talks with Chrysler LLC to acquire some or total assets of the company after General Motors Corporation (GM) halted meetings with Chrysler.

Earlier this week, Chrysler, which is struggling to maintain depleting cash reserves, was abandoned by GM, which reported $2.5 billion net loss in third quarter earnings on Friday.

GM said, "While the acquisition could potentially have provided significant benefits, we have concluded that it is more important at the present time to focus on our immediate liquidity challenges, and, accordingly, we have set aside consideration of such a transaction as a near-term priority."

Another reason for the talks to fail was that last week Chrysler was not able to secure extra funds from the Treasury to help finalize a merger between the two large automakers.

"Chrysler LLC neither confirms nor discloses the nature of its private business meetings, as many times they do not come to fruition," Bob Nardelli, Chairman and CEO of Chrysler said in a statment on Friday.

On Saturday, a Hyundai Motor spokeswoman told the MarketWatch that the company is not considering taking over any of Chrysler's assets as it is consentrating on establishing overseas plants.

In September, the South Korea´s largest automaker had announced that it plans to construct $600 million plant in Sao Paulo, Brazil, which is the company's seventh overseas production base as it continues to diversify its operations.

Reports have been speculating that Hyundai has been in talks with Cerberus Capital Management LP, which owns 80 per cent of Chrysler's total stake on acquiring Chrysler's Jeep brand and other assets.

However, Hyundai's dismisal will not stop Cerberus from trying to team up with other automakers to stabalize its financial condition.

"we will continue to explore multiple strategic alliances or partnerships as we investigate growth opportunities around the world that would aid in our return to profitability," Chrysler's Nardelli said.

Meanwhile, the industry is facing difficult period as the number of sales of automobiles have fell to 15-year low by declining as much as 27 percent last month.

Recently, Standard & Poor's senior automotive credit analyst, Robert Schulz, said that General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), and Chrysler LLC are facing bankruptcy risk as global financial crisis deepens.