General Motors and Chrysler are accelerating merger discussions amid strong support from potential lenders that are eager to see a deal done, reports the WSJ. GM is set to report dismal Q3 earnings in coming weeks and is scrambling to find new sources of funding, which is spurring the auto maker to complete the deal as soon as the end of October, said people close to the matter. Major banks that have long lent to both companies, such as JPMorgan, are also keen to do a deal to help reduce exposure to the auto industry. Cerberus Capital Management, which owns Chrysler, is looking to have a stake in a combined GM-Chrysler. While some lenders such as JPMorgan have shown interest in equity in such a deal, several other lenders approached by the parties have passed on the deal. JPMorgan and Citigroup are representing Chrysler and Cerberus, while Morgan Stanley and Evercore Partners are representing GM. While the talks are still far from a firm deal, GM’s management team is hammering out a potential takeover of Chrysler and top executives remain bullish on the prospects of a combined GM and Chrysler.

This entry was posted by Gwen Robinson on Friday, October 17th, 2008 at 5:32 and is filed under Capital markets, M&A. Tagged with cerberus, chrysler, gm, jpmorgan. Edit this entry.