Skip navigation

DaimlerChrysler will settle suit over merger

DaimlerChrysler AG will pay $300 million to resolve class-action claims that Daimler-Benz AG deceived investors by characterizing the 1998 takeover of Chrysler Corp as a merger, according to a Bloomberg news report.

The company still faces a legal battle with billionaire financier Kirk Kerkorian, Chrysler's largest shareholder, who will not join the settlement, his lawyer says. A federal court trial on his fraud claims is set for December in Wilmington DE.

The investors, who sought $12 billion, would receive an estimated 40 to 50 cents per share depending on how many participate in the accord, investors' lawyers say. Shares of DaimlerChrysler, which did not admit to any wrongdoing, have fallen 51% since the $36 billion combination took effect in November 1998 as profits have failed to meet investors' expectations.

“Considering the potential risk if things had turned out the wrong way for DaimlerChrysler, it made sense to settle the suit,” said Alexander Scholl, who helps manage the equivalent of $14.7 billion at HSBC Trinkaus Capital Management in Dusseldorf, Germany.

“In the context of their earnings, this isn't a lot of money,” said Scholl, who refused to say how many DaimlerChrysler shares HSBC Trinkaus holds.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.