DaimlerChrysler Closes Transaction on Transfer of
Date: Friday, August 03 @ 23:00:00 UTC
DaimlerChrysler Closes Transaction on Transfer of
Majority Interest in Chrysler to Cerberus
-- Dr. Dieter Zetsche, Chairman of the Board of Management of
DaimlerChrysler AG and Head of Mercedes Car Group: "Today marks a new chapter in
the history of our company."
-- Extraordinary Shareholders' Meeting to decide on change of name on
October 4, 2007
STUTTGART, Germany, Aug. 3 -- DaimlerChrysler today completed the
closing for the transfer of a majority interest in the Chrysler Group and for
the related financial services business in NAFTA to a subsidiary of Cerberus
Capital Management, L.P., a private- equity company based in New York. A
subsidiary of Cerberus takes over 80.1% in the Chrysler Holding LLC, while
DaimlerChrysler retains a 19.9% interest, as announced in May 2007.
The effects on the financial statements of DaimlerChrysler will be explained
on August 29, 2007.
Basically, the conditions of the transaction and the economic effects have
not changed since the agreement was signed on May 14, 2007. Furthermore,
DaimlerChrysler and Cerberus have agreed to support the financing of the
majority takeover of Chrysler by Cerberus in light of highly volatile US loan
markets. Both companies will subscribe $2 billion of second lien debt for
Chrysler's automotive business, to be drawn within 12 months. DaimlerChrysler's
portion will be $1.5 billion. The debt will be priced at market conditions. One
year after the closing, DaimlerChrysler has the right to sell this loan in the
credit market. The maturity of this loan is 7 years.
DaimlerChrysler's financing support is a strong sign of its overall
determination to make sure that, under the majority of Cerberus, Chrysler has a
good start as a successful stand-alone car company.
As of today, the Board of Management of DaimlerChrysler AG is reduced to six
members: Tom LaSorda, Eric Ridenour and Tom Sidlik are no longer members. Within
the Board of Management, Bodo Uebber additionally assumes responsibility for
Due to the new corporate structure, DaimlerChrysler AG is to be renamed as
Daimler AG. The shareholders are to decide on this change at an Extraordinary
Shareholders' Meeting in Berlin on October 4, 2007.
Dr. Dieter Zetsche, Chairman of the Board of Management of DaimlerChrysler AG
and Head of the Mercedes Car Group: "Today marks a new chapter in the history of
our company. Based on the clearly defined strategies in our Mercedes Car Group,
Truck Group, Financial Services business divisions and for vans and buses, and
our company's healthy balance sheet, we have every reason to move confidently
into the future."
This do*****ent contains forward-looking statements that reflect our current
views about future events. 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 raise prices and reduce sales incentives; 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; the business
outlook of Chrysler in which we hold an equity interest, including the ability
to successfully implement its Recovery and Transformation Plan; the business
outlook for our Truck Group, which may experience a stronger than originally
expected decline in demand as a result of accelerated purchases in 2006 made in
advance of the effectiveness of stricter 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.
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