FRANKFURT, Germany (AP) _ German-based DaimlerChrysler said Monday it will sell almost all of money-losing Chrysler to a private equity firm for $7.4 billion, backing out of a troubled 1998 takeover of the Jeep and Dodge maker aimed at creating a global automotive powerhouse.

Eighty percent of Chrysler Group, burdened by high pension and health costs and declining market share in the United States, will be sold to Cerberus Capital Management LP. Cerberus is taking a huge risk by agreeing to take on billions of dollars in pension and retiree health care costs at Chrysler.

Cerberus Chairman John Snow, a former U.S. treasury secretary, told a news conference in Germany that the New York-based private equity firm believes in Chrysler and wants to see it recover.

“We think at this particular point in Chrysler’s history, there may be opportunities in the private world, the world of private investment, that create more room for growth and expansion, that allow management to focus with greater intensity on the day-to-day business of producing better cars,” Snow said.

DaimlerChrysler AG said Monday it will sell 80.1 percent of the money-losing Chrysler to Cerberus in a stunning reversal of the $36 billion takeover by Daimler-Benz AG in 1998.

The move is a huge bet for Cerberus, which has agreed to take on billions of dollars in pension and retiree health care costs at Chrysler.

Cerberus has steadily been building strength in the automobile business. It led a consortium that bought a majority stake last year in General Motors Acceptance Corp., the financial arm of GM, and plans to invest in ailing auto parts giant Delphi.

The prospect of a sale to a private equity firm had worried unions in the United States and Canada because of the firms’ tendency to slash costs and jobs.