May 1, 2008 / 6:06 AM / 10 years ago

Cerberus says won't invest in Blackwater USA

NEW YORK (Reuters) - Cerberus Capital Management LLC, the buyout fund managed by investor Stephen Feinberg, on Thursday said it decided not to invest in Blackwater USA, the private security firm that guards U.S. State Department personnel.

Cerberus, which controls automaker Chrysler LLC and dozens of other companies that generate more than $100 billion in annual sales, had considered investing some $200 million into Blackwater, according to a source close to the situation.

“We have made a decision not to pursue a transaction with Blackwater,” said Peter Duda, a Cerberus representative. He declined to disclose further details about the transaction that it had considered, including its possible size.

Blackwater could not be reached for comment.

Blackwater, which guards U.S. government personnel in Iraq and elsewhere, faced heavy criticism and an FBI investigation over the killing of 17 Iraqi civilians in a crowded Baghdad square last September.

Reporting by Dane Hamilton, editing by Gerald E. McCormick

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