Mercedes-Benz Group AG

  • WKN: 710000
  • ISIN: DE0007100000
  • Land: Deutschland

Nachricht vom 14.05.2007 | 10:28

DaimlerChrysler AG: Cerberus takes over majority interest in Chrysler Group and related financial services business for €5.5 billion ($7.4 billion) from DaimlerChrysler

DaimlerChrysler AG / Strategic Company Decision

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

• Affiliate of Cerberus to acquire 80.1% equity interest in new company  
  Chrysler Holding LLC; DaimlerChrysler AG to retain 19.9% 
• Obligations for pensions and healthcare costs to be retained by 
  Chrysler companies 
• Transaction expected to result in net cash outflow of 
  €0.5 billion for DaimlerChrysler 
• DaimlerChrysler’s net profit according to IFRS in 2007 to be reduced in 
  a range of €3-4 billion 
• Equity ratio of DaimlerChrysler’s industrial business is expected to be 
  over 40% by the beginning of 2008 
• Extraordinary Shareholders’ Meeting to decide on change of name to 
  Daimler AG 
• DaimlerChrysler CEO Dieter Zetsche on the realignment of 
  DaimlerChrysler AG: 'We will be the leading manufacturer of premium 
  vehicles and a provider of premium services in every market segment we 
  serve worldwide.' 
• UAW President Ron Gettelfinger: 'The transaction with Cerberus is in 
  the best interests of our UAW members, the Chrysler Group and Daimler.' 
• Cerberus Capital Management Chairman John Snow: 'Cerberus believes in 
  the inherent strength of U.S. manufacturing and of the U.S. auto 
  industry. Most importantly, we believe in Chrysler.'

Stuttgart - The Board of Management of DaimlerChrysler AG (stock-exchange
abbreviation DCX) has today decided, subject to the approval of the
Supervisory Board, on the future concept for the Chrysler Group and the
realignment of DaimlerChrysler AG. Completion of the transaction is subject
to the satisfaction of customary closing conditions, including the receipt
of regulatory approvals and Cerberus financing arrangements.
Details will be explained at a press conference in Stuttgart today at 
2 p.m. 

Structure of the transaction 

• An affiliate of private equity firm Cerberus Capital Management, L.P., 
  New York, will make a capital contribution of €5.5 billion ($7.4 
  billion) in return for an 80.1% equity interest in the future new 
  company, Chrysler Holding LLC. DaimlerChrysler will hold a 19.9% equity 
  interest in the new company. Chrysler Holding LLC will hold 100% each 
  of the future Chrysler Corporation LLC, which produces and sells 
  Chrysler, Dodge and Jeep® vehicles, and the future Chrysler Financial 
  Services LLC, which provides financial services for these vehicles in 
  the NAFTA region. 
• Of the total capital contribution of €5.5 billion, €3.7 billion will 
  flow into the industrial business (Chrysler Corporation LLC) and €0.8  
  billion will flow into the financial services business in order 
  to strengthen the equity base of both businesses. DaimlerChrysler will  
  receive the balance of €1.0 billion. In addition, DaimlerChrysler will 
  grant a loan of €0.3 billion to Chrysler Corporation LLC. 
• According to the agreement, upon the closing of the transaction, 
  DaimlerChrysler will transfer the industrial business of the Chrysler 
  Group completely free of debt. Due to the Chrysler Group’s anticipated 
  negative cash flow until closing in connection with its restructuring 
  plan, the transaction will give rise to a cash outflow of €1.2 billion 
  for DaimlerChrysler. The overall net cash outflow resulting from the 
  transaction will therefore be €0.5 billion. In addition, 
  DaimlerChrysler will have to discharge long-term liabilities of the 
  Chrysler Group in connection with the transaction. This will result in 
  prepayment compensation of approximately €650 million, to be borne by 
  DaimlerChrysler. The usual transaction costs will also be incurred. 
• The Chrysler Group’s financial obligations for pension and healthcare 
  benefits towards its employees and the employees of the financial 
  services business related to the Chrysler Group will be retained by the 
  Chrysler companies. The pension plans are significantly over-funded at 

Effects on key figures 

The transaction will have the following effects on DaimlerChrysler AG: 

• In total, current estimates indicate that net profit according to IFRS 
  in 2007 will be reduced by €3-4 billion. 
• Due to the deconsolidation of the Chrysler companies and the resulting 
  reduction in the balance-sheet total, the equity ratio of 
  DaimlerChrysler’s industrial business is expected to increase to more 
  than 40% by the beginning of 2008. 
• There will be no changes relating to the bonds issued and guaranteed by 
  DaimlerChrysler AG. In the financial services business for the 
  Chrysler, Jeep ® and Dodge brands, Cerberus will take over the 
  financing previously provided by DaimlerChrysler AG. 
• The 19.9% equity interest held by DaimlerChrysler AG in the new company 
  Chrysler Holding LLC will be included after closing at equity in the 
  Van, Bus, Others segment. 
• The closing of the transaction is expected to take place in the third 
  quarter of 2007. 

For the reader’s convenience, the financial information has been translated
from euros into US dollars at an assumed rate of €1 = $1.35. The
convenience translation does not mean that the euro amounts actually
represent the corresponding dollar amounts stated or that they could be
converted into dollars at the assumed rate.

This document contains forward-looking statements that reflect our current
views about future events, including, among others, the pendency and
consummation of the transaction with Cerberus Capital Management, L.P.
regarding Chrysler Group. The words 'anticipate,' 'assume,' 'believe,'
'estimate,' 'expect,' 'intend,' 'may,' 'plan,' 'project,' 'should' and
similar expressions are used to identify forward-looking statements. These
statements are subject to many risks and uncertainties, including an
economic downturn or slow economic growth, especially in Europe or North
America; changes in currency exchange rates and interest rates;
introduction of competing products and possible lack of acceptance of our
products or services; competitive pressures which may limit our ability to
reduce sales incentives and raise prices; price increases in fuel, raw
materials, and precious metals; disruption of production or delivery of new
vehicles due to shortages of materials, labor strikes, or supplier
insolvencies; a decline in resale prices of used vehicles; our ability to
close the transaction with Cerberus Capital Management, L.P., regarding
Chrysler Group; the ability of the Chrysler Group to implement successfully
its Recovery and Transformation Plan; the business outlook for our Truck
Group, which may experience a significant decline in demand as a result of
accelerated purchases in 2006 made in advance of the effectiveness of new
emission regulations; effective implementation of cost reduction and
efficiency optimization programs, including our new management model; the
business outlook of our equity investee EADS, including the financial
effects of delays in and potentially lower volume of future aircraft
deliveries; changes in laws, regulations and government policies,
particularly those relating to vehicle emissions, fuel economy and safety,
the resolution of pending governmental investigations and the outcome of
pending or threatened future legal proceedings; and other risks and
uncertainties, some of which we describe under the heading 'Risk Report' in
DaimlerChrysler’s most recent Annual Report and under the headings 'Risk
Factors' and 'Legal Proceedings' in DaimlerChrysler’s most recent Annual
Report on Form 20-F filed with the Securities and Exchange Commission. If
any of these risks and uncertainties materialize, or if the assumptions
underlying any of our forward-looking statements prove incorrect, then our
actual results may be materially different from those we express or imply
by such statements. We do not intend or assume any obligation to update
these forward-looking statements. Any forward-looking statement speaks only
as of the date on which it is made.

DGAP 14.05.2007 
Language:     English
Issuer:       DaimlerChrysler AG
              Mercedesstraße 137
              70327 Stuttgart Deutschland
Phone:        +49 (0)711-17 413 61
Fax:          +49 (0)711-17 413 72
ISIN:         DE0007100000
WKN:          710000
Indices:      DAX, EURO STOXX 50
Listed:       Amtlicher Markt in Frankfurt (Prime Standard), Stuttgart;
              Freiverkehr in Berlin-Bremen, Hannover, München, Hamburg,
              Düsseldorf; Foreign Exchange(s) NYSE
End of News                                     DGAP News-Service

Events im Fokus

Termine 2022

1./2. Juni 2022: Fachkonferenz Immobilien & Software | IT

13./14. Juli 2022: Fachkonferenz Beteiligungsgesellschaften & Consumer/Leisure

12./13. Oktober 2022: Fachkonferenz Finanzdienstleistungen/Technologie

Aktueller Webcast

TK Elevator GmbH

Webcast Q2 2022

27. Mai 2022

Aktuelle Research-Studie


Original-Research: SBF AG (von Montega AG): Kaufen

24. Mai 2022