Russia is harnessing natural resources to create an economic superpower.
Russia’s oligarchs may be trying to buy respectability and shed their robber-baron image by buying into public companies overseas.
Sales from Russia’s enormous reserves of oil and gas have pushed its economy to heights unseen since its dramatic post-communist collapse. From the brink of bankruptcy in 1998, Russia’s foreign reserves, estimated at roughly $330-billion are second only to those of China and Japan.
To my surprise, Chrysler was very close to becoming part of a Russian expansion into western markets.
Toronto’s Globe & Mail is one news source, of only a few I’ve found, that attempted to look closely at the sale of Chrysler.
Why did DaimlerChrysler in effect pay Cerberus to take Chrysler off its hands?
Was there an effort to search for a more preferred buyer? Days before Cerberus stepped over home base, Magna was the top contender. Magna is North America’s largest auto parts consortium. And Magna had recently invited Russian players to join their operations.
Enter stage left: 39-year-old oligarch Oleg Deripaska bought a $1.54-billion piece of car parts giant Magna International Inc. and its dream of acquiring DaimlerChrysler’s U.S. operations.
Deripaska, whose empire includes Russia’s No. 2 auto maker and UC Rusal, the world’s leading aluminum producer, needs foreign technology to build his Russian auto-making company and diversify geographically.
Where is the profit in the automobile sector? Another under reported feature of the Chrysler swap is that Cerberus becomes the nation’s largest finance company for vehicles.