DaimlerChrysler AG’s shareholders are expected to formally sign off Thursday on the end of car giant’s merger with the US auto Chrysler when they approve a move to change the company’s name to just Daimler AG.
The extraordinary meeting in Berlin of DaimlerChrysler stockholders coincides with the release of data showing sales of its flagship Mercedes Benz cars jumping by seven per cent in September. “The strength of our brands is one of our most valuable assets,” DaimlerChrysler chief Dieter Zetsche told shareholders, arguing for the name change. “Clearly, one of our central tasks is to maintain and enhance that strength,” he said. “No other automobile brand shines as brightly as the Mercedes star,” Zetsche said with the decision to drop Chrysler from its company name helping to mark a new start for the Stuttgart-based automaker after ending what was once billed as “a marriage made in heaven.”
The rocky union with Chrysler came to an end in August, when DaimlerChrysler sold off an 80.1% stake in its former US Chrysler offshoot to the US investor Cerberus for about €5.5 billion ($7.8 billion). “The group name ‘Daimler’ clearly indicates that we are writing a new chapter of our history, while at the same time continuing our tradition as the inventor of the automobile. And this rich heritage will remain an essential part of our identity - of our DNA, so to speak,” Zetsche said. “We’re combining our proud origins and a bright future - honoring our long tradition and harnessing our pioneering spirit,” Zetsche said. “The name Daimler is an expression of this dual identity.”
While Daimler is to retain a 19.9% holding in Chrysler, Thursday’s shareholder meeting will formally mark the end of the 1998 merger with the US automaker and the Stuttgart-based group’s ambitions to build a Welt AG or World Inc., with an empire spanning Asia to the US and Europe. A new Daimler company logo is to be unveiled following the meeting with the company quickly launching an operation to remove DaimlerChrysler from the company’s sites around the world with the total cost of the changeover expected to run to several million euros and expected to last several months.
In August, the German carmaker said the breakup of its corporate marriage with US auto group Chrysler would cost the company €2.5 billion this year. After an initial burst of optimism, the $36 billion merger between Daimler and Chrysler sent DaimlerChrysler’s share price tumbling. At one point, the group’s market value was almost halved, sparking stockholder anger that the group’s ambitious global expansion had failed to live up to company promises. More recently, investors have demonstrated their confidence in the German carmaker’s future as a single entity by boosting its share price. DaimlerChrysler shares rose by 8.7% last month consequently turning the company’s stock into one of the best performers on the Frankfurt Stock Exchange. However, the shares edged down 0.3% to €72.58 as Thursday’s shareholders’ meeting got underway in Berlin in lackluster morning trading on the Frankfurt Stock Exchange.
The end of the merger with Chrysler also essentially took Daimler back to where it was before it launched its plans to build a global business empire. The deal to sell off Chrysler to New York-based Cerberus came three years after DaimlerChrysler dramatically pulled out of an alliance with Japan’s debt-ridden Mitsubishi Motors Corp. The tie-up with Mitsubishi and the merger with Chrysler formed key pillars of former DaimlerChrysler chief Juergen Schrempp’s push to transform the company into a global corporation. (m&c.com)