Separation of Chysler
Decision on Sale of Chrysler and on realignment of Daimler
You can find the news released on May 14, 2007 and the speech of our chairman of the board of management, Dr. Zetsche, and the recordings of the press conference and the analysts’ and investors’ conference callhere.
Closing of the transaction
You can find the news released on August 03, 2007 here.
Change of the Corporation's name to Daimler AG
The name change from DaimlerChrysler AG to Daimler AG became legally effective on a global basis as of the date of the entry into the German commercial register (Handelsregister) on October 19, 2007 here.
Redemption of the remaining 19.9% shareholding
The news release of April 27, 2009 about the agreement on the separation from Chrysler is available here.
Adjusting shares
There was no change in ownership due to the transaction. It was not required that shareholders took any actions, because only the name of the share changed from DaimlerChrysler to Daimler. There are no shares of Chrysler Holding LLC. Also the redemption of the remaining 19.9% shareholding to Cerberus did not affect the former Chrysler or DaimlerChrysler shareholders.
Bonds
All our bonds were unconditionally and irrevocably guaranteed by DaimlerChrysler AG. The sale of Chrysler did not affect the position of our bondholders.
Changing the Company name
An extraordinary shareholders` meeting took place in Berlin, Germany on October 04, 2007 and decided upon the change of the company’s name. Since then, the company operates under its new name Daimler AG instead of DaimlerChrysler AG.
Company name "Daimler"
The proposal by the Management to change the name of the corporation takes consideration of requirements concerning the legal aspects of brand names as well as strategic factors. The name Daimler has a high profile and evokes a high degree of confidence in the expertise of the corporation as a globally respected manufacturer of automobiles and commercial vehicles.
With Daimler, we will also avoid overlaps between the brand of the corporation and the most valuable automobile brand name in the world, Mercedes-Benz. The name Daimler is significantly more open with regard to the positioning of the brand portfolio than “Mercedes-Benz” or “Daimler-Benz” for example, and therefore is suitable to serve as a corporate name for all our products – not only for Mercedes-Benz but also for Freightliner, Setra, smart etc. With the proposed name of Daimler, the corporation is continuing its tradition while simultaneously signaling a new start. The contributions of Bertha and Karl Benz continue to be honored through the unchanged brand name “Mercedes-Benz”. Mercedes-Benz will continue to be visible where customers want to purchase our products, i.e. all foreign subsidiaries that sell almost exclusively Mercedes-Benz products will be renamed as Mercedes-Benz companies. And all plants that manufacture Mercedes-Benz products will be renamed as Mercedes-Benz plants.
DRIP Dividend Reinvestment Program
Our Dividend Reinvestment Program “Buy Direct” available to shareholders in the USA will be continued with Daimler shares. Program participants do not need to take any actions.
Will holders of DaimlerChrysler share certificates continue to receive dividend checks on their DaimlerChrysler certificates or do they need to exchange their certificates?
We will continue to issue dividend checks on DaimlerChrysler certificates even after the company will have started operating as Daimler. So an exchange of DaimlerChrysler certificates to Daimler certificates will not be necessary.
Will there be Daimler share certificates?
No.
Did the ISIN change?
No, the ISIN remains DE 000 7100000.
Did the stock abbreviation change?
Yes. After the closing of the Chrysler transaction the ticker symbol has changed on August 09, 2007 from DCX to DAI.
Is the Daimler share also listed on the stock exchanges where the DaimlerChrysler share was listed?
Yes, the Daimler share is listed at the stock exchanges in Frankfurt, New York, Stuttgart.
Why did you choose Cerberus and not another offer?
We had defined a number of areas where we would be focusing on, striving for the best results possible and making a final evaluation on.
This was in the first place the best starting point for Chrysler to go into a successful future.
It was secondly, a transaction which would relieve Daimler from all risks associated with this business, including health care and all other elements, risk elements, liability elements, associated with the Chrysler business.
Third, it was the certainty of the transaction, so we did not want to be stuck halfway but have certain ending of that transaction.
And fourth, it was speed. We wanted to make absolutely sure that this unfortunate time of uncertainty within Chrysler, for the Chrysler employees and the Chrysler business partners, would be as short as reasonably possible. I think three months is a relatively good answer to that.
And fifth, it was the best possible value of the transaction.
Fortunately, in all five categories, Cerberus gave us the best offer, which made it relatively easy for us to come to this decision.
Structure of the transaction in August 2007
CG Investor LLC, a subsidiary of Cerberus Capital Management, made a capital contribution of €5.2 billion (US $7.2 billion) in return for an 80.1% equity interest in Chrysler Holding LLC. Daimler held a 19.9% equity interest in this new company. Chrysler Holding LLC holds 100% of both Chrysler LLC, which produces and sells Chrysler, Jeep® and Dodge vehicles, and Chrysler Financial Services LLC, which provides financial services for these vehicles in the NAFTA region.
DaimlerChrysler transferred the industrial business of the Chrysler Group to Cerberus completely free of debt at the time when the transaction was completed in August 2007.
The Chrysler Group’s financial obligations towards its employees and the employees of Chrysler Financial Services for pensions and healthcare benefits are retained by the Chrysler companies. Daimler provided a guarantee of US $1 billion to be paid in the event that the Chrysler Group’s pension plans terminate within the next five years after August 2007. The pension plans were significantly over-funded at that time.
Why did Daimler redeem the remaining 19.9% shareholding?
The details of a restructuring / rescue plan for Chrysler were not finally decided by April 27, 2009. Daimler was not interested in becoming a shareholder in a whatsoever restructured Chrysler. But we wanted to contribute our part to enable a restructuring of Chrysler and not stand in its way as well as complete the separation of Chrysler.-
The agreement was reached on April 27, 2009 between the US federal Pension Benefit Guaranty Corporation (PBGC), Chrysler, Cerberus and Daimler AG.
-
Daimler redeems its remaining 19.9% shareholding in Chrysler Holding LLC
-
Daimler forgives repayment of the two loans extended to Chrysler, which were already written off in the 2008 financial statements.
-
Thus, all pending issues with Cerberus s well as with Chrysler have been finally agreed upon.
When did the complete redemption of the remaining 19.9 % to Cerberus become effective?
The complete redemption of the remaining 19.9 % interest in Chrysler Holding LLC became effective on June 4, 2009.
Which payments will Daimler have to make?
We agreed to provide three payments (cash-effective) of USD 200 million each for the Chrysler pension plans, a total of USD 0.6 billion over the next three years. The three installments become due on the anniversary of the Closing, i.e. probably in the 2. quarter of 2009, 2010 and 2011.
What happens with the pension guarantee of 1 billion USD?
The PBGC Guarantee was reduced from USD 1.0bn to USD 0.2bn. This guarantee will continue to last until August 2012.
Which burdens will Daimler have to face after Chrysler filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code?
As risk for Daimler we see a pension guarantee of USD 200 million as well as additional guarantees granted by Daimler in the 2007 transaction, which largely are secured by a custodial account. Daimler furthermore remains supplier to Chrysler on components i.e. engines, transmissions as well as of certain services i.e. dealer financing until end of September 2009.
On this page
Questions & Answers
