Steve Wright <[EMAIL PROTECTED]> writes:
Yea I heard that one this morning, mergers dont get much bigger than that.
Did you hear that Rolls Royce is now owned by BMW?
Steve
p.s I know back to work, im going, im going.
-----Original Message-----
From: Ronald Helm <[EMAIL PROTECTED]>
To: Law-Issues <[EMAIL PROTECTED]>
Date: Thursday, May 07, 1998 8:50 PM
Subject: L&I Daimler/Chrysler
"Ronald Helm" <[EMAIL PROTECTED]> writes:
Now this is big time news! I wondered why my Chrysler stock jumped 10
points yesterday, now I know. Rin
Chrysler, Daimler-Benz Agree to Merge
By John Hughes
AP Business Writer
Thursday, May 7, 1998; 9:12 a.m. EDT
DETROIT (AP) -- Chrysler Corp. is being acquired by Germany's Daimler-Benz
for more than $38 billion in stock in a deal that will reshape the
automaking industry and give both companies a bigger stake in the global
market.
The new company, DaimlerChrysler, combines a German luxury car maker with
the No. 3 U.S. automaker which once used a ``Buy American'' slogan and is
now known for Jeeps, minivans and light trucks.
The agreement was formally announced today and the deal would rank as the
biggest industrial merger ever.
At a joint news conference in London this morning, chairmen of both
companies said the deal increases their potential for growth.
``Together we believe the potential is literally unlimited,'' Chrysler
Chairman Robert J. Eaton said.
Companies in Profile
Chrysler
Business: Researches, designs, makes and sells cars, trucks and related
parts and accessories
Brands: Chrysler, Dodge, Plymouth, Eagle and Jeep
Based: Auburn Hills, Mich.
Established: 1925
Employees: 121,000
1997 sales: $58.62 billion
1997 net income: $2.81 billion
Yesterday's closing stock price: $48.81D, up $7.37A
Web site address: www.chryslercorp.com
Daimler-Benz
Business: Makes, markets and sells luxury cars, trucks and other vehicles;
also provides aerospace and defense services, as well as financial services
Brands: Mercedes-Benz, Freightliner Trucks
Based: Stuttgart, Germany
Established: 1885
Employees: 290,000
1997 sales: $69.26 billion*
1997 net income: $4.49 billion*
Yesterday's closing stock price: $99, up $7.23Q
Web site address: www.daimler-benz.com
*Converted to U.S. dollars using Dec. 31 exchange rate
SOURCES: Bloomberg News, company reports
Eaton predicted that the merger is just the beginning as the auto industry
continues to become more global. ``We are leading a new trend we believe
will change the future, the face of the industry,'' he said.
No plant closures or layoffs will result from the merger, Daimler-Benz
Chairman Juergen E. Schrempp said.
``On the contrary, we estimate with the combined strength we will grow, we
will add volume and we will be creating jobs on both sides of the
Atlantic,'' he said.
The merger, Schrempp said, creates ``the world's leading automotive company
for the 21st century ... one that will set the pace in the automotive world
in the next millenium.''
Also this morning, German television ZDF quoted Schrempp as saying
DaimlerChrysler will have joint management for three years, then Schrempp
will take over and Eaton will step aside.
The merger will give Chrysler greater access to the European market,
something it has strived for.
And since two of every three vehicles that Chrysler makes is a light truck,
the German company may very well participate in the popular pickup and
minivan segments that haven't made as much sense for a luxury brand.
Some analysts doubted that dealerships will sell Mercedes-Benz models
side-by-side with Chrysler minivans, however.
Eaton said the companies complement each other perfectly, and will
``maintain the current brands and their distinct identities.''
Directors of both companies have approved the deal, which is expected to be
completed by the end of this year if approved by shareholders, the
Daimler-Benz supervisory board and government regulators.
The transaction sets an exchange ratio of 0.547 Daimler-Benz shares for each
Chrysler share, leaving Daimler-Benz shareholders in control of 57 percent
of the new company and Chrysler shareholders with the rest.
At Wednesday's closing Daimler price, that means Chrysler shareholders will
get about $59.38 a share in stock for each of their shares. With 645.5
million shares outstanding, that values Chrysler at about $38.3 billion.
DaimlerChrysler will be jointly led by Eaton and Schrempp. The new company
will have two headquarters -- in Auburn Hills, Mich., and Stuttgart,
Germany -- and will employ 422,000 people worldwide.
No plant closures or layoffs were planned, the companies said.
Analysts praised the plan, but said joining Chrysler with the largest
industrial company in Germany was no simple matter.
``The footprints of these companies are totally different,'' said David
Healy, an analyst with Burnham Securities Inc. ``Management culture is
different.''
While the company that owns Mercedes-Benz is highly structured and formal in
its management, Chrysler prefers a more freewheeling environment.
``A moderate amount of culture clash is healthy if managed well. One of the
benefits of a merger can be learning from each other, if the two sides can
do something better than either could do on its own,'' said Mitchell Lee
Marks, a independent management consultant in San Francisco.
Analysts said a deal makes sense. The companies could blend research and
development arms to speed products to market, save costs and even use the
same vehicle frames to create Mercedes and Chrysler vehicles.
Phil Gott, an analyst at DRI McGraw-Hill, said U.S. car sales will grow very
slowly, if at all, over the next five years.
``So in order to grow their business, Chrysler does need to go global, and
Mercedes gives them access to Europe and other parts of the world quite
easily,'' he said.
The companies together will form a much greater industry presence. If wholly
merged, they would have had revenues of $131 billion last year -- $70
billion for Daimler-Benz and $61 billion for Chrysler.
By comparison, No. 1 world automaker General Motors Corp. had nearly $178
billion in revenue last year and No. 2 Ford Motor Co. had $154 billion.
The move marks a stark change from Chrysler officials' past advocacy of
``Buy American,'' especially prevalent after the company went to the brink
of bankruptcy in 1979 before a government bailout.
Chrysler is a powerhouse in the United States, with 94,300 employees and a
16 percent share of new vehicle sales this year. Only GM and Ford sell more,
with shares of 31 percent and 24 percent, respectively.
Daimler produces luxury autos, trucks and buses via its Mercedes-Benz
division. Other Daimler divisions are involved in areas like aerospace,
defense and financial services; today's statement said only that the merger
will allow those businesses to grow and pursue expansion strategies.
Mercedes-Benz has increased U.S. sales 67 percent this year with the help of
its hot-selling M-Class sport utility vehicle. But the automaker accounts
for little more than 1 percent of U.S. auto sales so far this year.
Similarly, Chrysler sold only 17,713 vehicles outside North America last
month, more than half of that in Europe. It sold nearly 221,000 vehicles in
the United States last month.
Copyright 1998 The Associated Press
To succeed in politics, it is often necessary to rise above your
principles.
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