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MiscellaneousShareholders Approve Merger
Posted by mike on 1998/9/21 0:00:00 (1030) reads

From an article published by Reuters news service:

WILMINGTON, Del., Sept. 18 (Reuters) - Chrysler Corp. shareholders on Friday approved the company's historic merger with Germany's Daimler-Benz AG, bringing it a step closer to creation of the world's fifth-largest automaker.

Chrysler said 97.5 percent of those voting at a special two-hour meeting in Wilmington, Del., approved the merger, valued at more than $40 billion. The votes represented 472.6 million shares. About 2.5 percent, representing 12 million shares, voted against it.

About 75 percent of Chrysler's shares were voted.

``This (merger) is different because it is not a desperate attempt by two weak companies to survive by leaning on each other,'' Chrysler Chairman Robert Eaton told about 200 shareholders in an ornate ballroom of a downtown hotel.

``This is not a merger to rationalize costs,'' he added. ``It's a merger to produce growth. We aren't destroying redundancies. We're creating opportunities.''

A similar but better-attended meeting of 20,000 shareholders in Stuttgart, Germany, was still in progress Friday afternoon. While most Chrysler shareholders had voted their shares before the Wilmington gathering, the German meeting might last into the evening because shareholders in that country must vote in person.

Eaton said he expects the deal, announced on May 7, to close by mid-November. The only thing that could derail the merger is if less than 75 percent of German shareholders approve the deal, meaning it would be taxable for U.S. shareholders. But Eaton said he does not expect that to occur.

Both firms are aiming for a 90 percent approval rate in Germany, however, because it would give the merger ``pooling of interest'' status. Without that, the new company, DaimlerChrysler AG, will have to account for a goodwill charge of $35 million spread over the next 40 years.

DaimlerChrysler stock will be listed on at least 21 stock exchanges when it begins trading, Eaton said. It will trade under the symbol ``DCX'' on the New York Stock Exchange.

Lehman Brothers analyst Joseph Phillippi said the key to making the merger work will be integrating the two companies' operations.

``As long as they can truly blend together the two cultures, it should be very powerful,'' he said, adding that the Mercedes and Jeep brand names are among the strongest in the world.

The merger would create an automaker with annual production of 4 million cars and trucks, including such strong brands as Mercedes cars and Jeep sport utility vehicles. The new company will employ 412,000 people and have annual sales of $130 billion and earnings of $4.5 billion.

Daimler also has operations in aerospace, services and rail systems, diesel engines and automotive electronics.

Some Chrysler shareholders at Friday's meeting voiced opposition to the deal, citing Daimler's involvement with the Nazis during the Second World War.


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