Mercedes Merger with Chrysler

In May 1998, merger between Chrysler Corporation and the German automaker Daimler-Benz took place. The name of the newly formed company was DaimlerChrysler which became the fifth largest maker of automobile around the globe.

This merger is addressed as the deal of the century and it had set a trend which is now followed by the other giants. The value of the merger was 92 billion dollars.

Although Mercedes-Benz was able to increase their sales in the United states, in 1998 it was almost 67%, but still it couldn't catch the entire US market. Similarly, Chrysler was able to sale only 17,713 vehicles outside America in April 1998 which was more than half than that of Europe. Aims:

Chrysler would be getting a greater access to the European market.

• Mercedes would be able to step ahead into the American market.
• The merger would increase the sale and help both the companies reduce the costs.
• The total profit amount would be reached up to 1.4 billion dollars within 1999.

Terms & Conditions:

• The new company will be jointly led by the CEOs of Chrysler Corporation and Daimler-Benz.
• The exchange ratio of the DaimlerChrysler's shares for each of the Chrysler's share would be 0.547.
• Each Daimler-Benz's share would be exchanged for a DaimlerChrysler's share.