Hyundai and Chrysler in talks as GM pulls out

By Jui Chakravorty Das and Kevin Krolicki

NEW YORK/DETROIT (Reuters) - South Korea's Hyundai Motor Co (005380.KS) has had talks with Chrysler LLC owner Cerberus Capital Management about a potential acquisition of the U.S. automaker's Jeep brand and possibly other assets, people with knowledge of the talks said on Friday.

The emergence of South Korea's largest automaker as a potential bidder for at least part of Chrysler comes on the same day General Motors Corp (GM.N) said it shelved its own pursuit of an acquisition of its cross-town rival.

Cerberus also plans to restart talks with other potential partners, including Renault-Nissan, the sources added.

Hyundai has expressed some interest in Chrysler's Jeep brand, but Cerberus would prefer to sell all of Chrysler rather than split off assets through a series of deals that would break up the company, the sources said.

Cerberus, Chrysler and Hyundai declined to comment.

Jeep is considered Chrysler's most valuable asset. Although Chrysler has been readying a step that would allow it to sell off Jeep and its supporting parts business readily, any move to dispose of the brand would signal the end of Chrysler as a stand-alone automaker, sources said.

The talks over the future of Chrysler are playing out just as the U.S. auto industry makes its case to U.S. lawmakers for an emergency rescue package to shore up the balance sheets of GM, Ford Motor Co (F.N) and Chrysler at time when all three are burning cash faster than ever.

GM, which had been seen as the leading candidate to buy Chrysler, said on Friday that it set aside its pursuit of the acquisition in order to focus on preserving cash for its own operations.