NEW YORK, (Reuters) - General Motors Corp and Chrysler have moved closer on Friday to offloading two niche vehicle brands associated with the era of cheap gasoline and big profits for Detroit, even as both sides intensified talks on a merger that would combine the struggling automakers.
GM will send out a sales prospectus for Hummer to possible bidders in the next few days and Indian automakers Tata Motors Ltd and Mahindra & Mahindra Ltd are among those who will take a look, a source familiar with the matter said.
Parties interested in looking at the prospectus have signed nondisclosure agreements and sent them in. That step is usually taken just before the financial data is sent out and books are typically sent to a wide range of parties.
Many companies look at the sales prospectus, not necessarily implying they would bid for it.
In fact, Mahindra & Mahindra, which plans to enter the U.S. auto market with its own vehicle next year, denied interest in Hummer earlier this year.
GM declined comment. Tata and Mahindra & Mahindra could not be immediately reached for comment.
Chrysler, which has identified about $1 billion in non- earning assets for potential sale to raise cash, said on Friday it received multiple bids for its Viper sports car business and was reviewing the offers.
Chrysler, which did not disclose the number of bids or the timeline of the sale, began reviewing strategic options for the the unit in August in an effort to raise cash to ride out a deepening U.S. auto industry downturn.
One person familiar with the process said no additional bids were likely to be considered.
CASH NEEDED FROM SALES
Both GM and Chrysler have been losing sales and market share amid a bruising decline in the U.S. market that has forced both to cut jobs, close factories and unload assets.
The step to provide financial data to Hummer buyers comes four months after Chief Executive Rick Wagoner said GM would look to sell the military-derived SUV brand that had become an emblem of gas-guzzling excess for many consumers.
GM has said it plans to raise up to $15 billion in cash through cost-cutting, borrowing and asset sales through the end of next year to ride out a slump in U.S. auto sales expected to drop to 18-year-lows in October.
At the same time GM is selling Hummer, the automaker is also looking at a potentially bigger deal to acquire Chrysler's auto operations from its majority owner Cerberus Capital Management, according to people familiar with those talks. (See related story: ID:nNLO252013)
Chrysler's best-known and most-valuable brand is Jeep and some analysts have questioned why GM would be considering a Chrysler acquisition at the same time it is trying to sell Hummer, an off-road competitor to Jeep with its macho, don't-tread-on-me styling.
Hummer sales have plunged 47 percent through September and two dozen Hummer dealers have closed their doors in the United States this year.
Analysts and bankers have said they expect GM to face a tough sell with Hummer because of the slump in global auto sales, frozen credit markets and the brand's niche status.
The original Humvees were multipurpose, off-road military vehicles, but maker AM General launched Hummer for civilians in 1992. GM bought the brand in 1999 and went on to sell the H1, H2 and H3 models.
The current line-up of Hummer models runs from roughly $31,000 to about $71,000 before incentives.
The Dodge Viper, also an iconic brand in the United States, is a low-volume V10-powered sports car first produced in 1992.
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