Daimler-Benz and Chrysler sign merger agreement
7 May 1998
Two of the world's most profitable car manufacturers, Daimler-Benz AG, and Chrysler Corporation, have agreed to combine their businesses in a merger of equals. Valued at $92 bn, it is the largest industrial merger ever.
The transaction will create a world-class automotive corporation ranked in the world's top three in terms of revenues, market capitalization and earnings. The new company, to be called DaimlerChrysler, and jointly led by Juergen E. Schrempp and Robert J. Eaton as Co-Chairmen and Co-Chief Executive Officers ("Vorstandsvorsitzende"), will be uniquely positioned to exploit the growth opportunities of the global automotive market in terms of geographical and product segment coverage. With Daimler-Benz's non-automotive businesses, including aerospace, services and rail systems, diesel engines and automotive electronics operations, DaimlerChrysler will be a world leader in transportation.
DaimlerChrysler AG, incorporated in Germany, will have two operational headquarters in Stuttgart, Germany, and Auburn Hills, Michigan, USA. The senior management will have 18 members drawn from both companies and, for a three-year period, will be co-headed by Robert J. Eaton and Juergen E. Schrempp. There will be a Chairmen's integration council with 7 members who will focus on realizing the combined strengths of DaimlerChrysler.
The merger will be accomplished through exchange offer and merger transactions in which stockholders of both companies will become stockholders of the new company. Daimler-Benz stockholders will hold one share of DaimlerChrysler for each Daimler-Benz share they now own. Chrysler stockholders will receive 0.547 of a DaimlerChrysler share for each Chrysler share they now own. The final ratio will be adjusted to reflect the special pay-out and capital increase transaction of Daimler-Benz scheduled for June 1998. The transaction is expected to be tax-free for both companies and their shareholders, and is currently planned to be accounted for as a pooling-of-interests.
Chrysler shareholders will hold approximately 43% of the new company, and Daimler-Benz shareholders will hold approximately 57%. DaimlerChrysler shares and ADSs will trade on all the same exchanges as do the Daimler-Benz shares and ADSs, including the Frankfurt Stock Exchange and the New York Stock Exchange. The transaction has been approved by the Chrysler Board of Directors and the Daimler-Benz Board of Management. It is subject to approval by the shareholders of both companies and the Daimler-Benz supervisory board, as well as regulatory clearance, a tax ruling and opinions and other customary conditions, and is expected to be closed by year-end.
Contact: Roland Klein, +49-711-17-93635, or Eckhard Zanger, +49-711-17-93311, both of Daimler-Benz Corporate Media Relations; or Rita McKay, 248-512-2698, or Mike Morrison, 248-512-0462, both of Chrysler Media Relations
|Chrysler Corporation||Daimler-Benz AG|
|Headquarters:||Auburn Hills, Mich.||Frankfurt, Germany|
|Chairman:||Robert J. Eaton||Juergen Schrempp|
|1997 revenue:||$61.1 billion||$70 billion|
|1997 income:||$2.8 billion||$2.4 billion|
|Major brand names:||Chrysler, Plymouth, Dodge, Eagle, Jeep||Mercedes-Benz, Daimler-Benz Aerospace AG (Dasa), Adtranz, TEMIC|
|Thumbnail:||Third largest US auto and truck manufacturer||Europe's largest industrial company; products include cars, trucks, buses, aircraft and diesel engines, automotive electronics, railroad equipment; holds 37.9% stake in European aircraft consortium Airbus Industrie|
|Founded:||1925 by Walter Chrysler||1871 by Carl Benz|
Source: Chrysler Corporation; Daimler-Benz AG