Daimler Chrysler Corp – ‘8-K’ for 5/7/98 – EX-99.2

As of:  Friday, 5/8/98   ·   For:  5/7/98   ·   Accession #:  950123-98-4713   ·   File #:  1-09161

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         5     16K 
 2: EX-2.1      Business Combination Agreement                       110    392K 
 3: EX-4.1      Amendment #1 to Rights Agreement                       4     13K 
 4: EX-99.1     Stockholder Agreement                                  8     21K 
 5: EX-99.2     Press Release                                          9     28K 

EX-99.2   —   Press Release

EX-99.2
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[DAIMLER BENZ LOGO]                                  [CHRYSLER CORPORATION LOGO]

=============================================================================== 
Press Release 
=============================================================================== 

                                                           For immediate release
                                                                     May 7, 1998

Merger Agreement signed                                                         

DAIMLER-BENZ AND CHRYSLER COMBINE TO FORM                                       
THE LEADING GLOBAL AUTOMOTIVE COMPANY                                           

*  Chrysler Chairman Robert J. Eaton: "World class products and brands          
complement each other"                                                    

*  Daimler-Benz Chairman Juergen E. Schrempp: "Perfect fit of two market leaders
for further global growth"                                                

*  Benefits of $1.4 bn expected in 1999 - Annual benefits of $3 bn expected to  
be reached in the next several years                                      

*  No plant closures or lay-offs planned                                        

*  Exchange ratio set at 0.547 DaimlerChrysler shares for each Chrysler share - 
Each Daimler-Benz share will be exchanged for one DaimlerChrysler share   

*  Merger valued at $92 bn - largest industrial merger ever                     

Stuttgart, Germany/Auburn Hills, Michigan, USA - Two of the world's most        
profitable car manufacturers, Daimler-Benz AG (NYSE: DAI) and Chrysler          
Corporation (NYSE: C), have agreed to combine their businesses in a merger of   
equals.                                                                         

The transaction will create a world class automotive corporation ranked in the  
world's top three in terms of revenues, market capitalization and earnings. The 
new company, to be called DaimlerChrysler, and jointly led by Juergen E.        
Schrempp and Robert J. Eaton as Co-Chairmen and Co-Chief Executive Officers     
("Vorstandsvorsitzende"), will be uniquely positioned to exploit the growth     
opportunities of the global automotive market in terms of geographical and      
product segment coverage. With Daimler-Benz's non-automotive businesses,        
including aerospace, services and rail systems, diesel engines and automotive   
electronics operations. DaimlerChrysler will be a world leader in               
transportation.                                                                 

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The two companies combined had total 1997 revenues of approximately $130 bn (DM 
234 bn) and combined pre-tax profits of $6.9 bn (DM 12.5 bn). The merger,       
valued at $92 bn, will create the premier global automotive company with one of 
the strongest portfolios of world class brands in both passenger cars and       
trucks, as well as strong positions in Daimler-Benz's non-vehicle businesses.   

In 1997, the companies had combined operating cash flow of $12.7 bn (DM 22.8    
bn) and combined R&D expenditure of $7.1 bn (DM 12.8 bn). DaimlerChrysler will  
have 421,000 employees worldwide, and with its excellent growth opportunities,  
expects to increase this number.                                                

CHANGING THE FACE OF THE INDUSTRY                                               

"The two companies are a perfect fit of two leaders in their respective         
markets," said Juergen E. Schrempp, Chairman of the Management Board of         
Daimler-Benz. "Both companies have dedicated and skilled workforces and         
successful products, but in different markets and different parts of the world. 
By combining and utilizing each other's strengths, we will have a pre-eminent   
strategic position in the global marketplace for the benefit of our customers.  
We will be able to exploit new markets, and we will improve return and value    
for our shareholders. This is a historic merger that will change the face of    
the automotive industry."                                                       

Chrysler Chairman Robert J. Eaton said "Both companies have product ranges with 
world class brands that complement each other perfectly. We will continue to    
maintain the current brands and their distinct identities. What is more         
important for success; our companies share a common culture and mission. We are 
both clearly focused on serving the customer by building world class cars and   
trucks, we both have a reputation for innovation and quality, and we are both   
committed to increasing value for our shareholders. DaimlerChrysler has the     
most skilled and innovative workforce in the industry and we are committed to   
making their future as bright as the new company's. By realizing synergies and  
with our combined financial and strategic strengths, we will be ideally         
positioned in tomorrow's marketplace."                                          

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BUILDING THE FUTURE ON COMBINED STRENGTHS                                       

There will be immediate growth opportunities by using each other's facilities,  
capacities and infrastructure. Product strategies will be developed to enhance  
growth in mature markets as well as in Asia and other emerging markets. In      
1999, the first year of merged operations, DaimlerChrysler expects to realize   
benefits of $1.4 bn (DM 2.5 bn) through the exchange of components and          
technologies, combined purchasing power, and shared distribution logistics.     
These synergies do not involve plant closures or lay-offs, nor do they include  
ongoing cost reduction programs.                                                

Further synergies are expected to be realized in the medium term by sharing     
know-how in engineering and manufacturing. The management expects annual        
benefits of $3 bn (more than DM 5 bn) within three to five years.               

DaimlerChrysler will have a portfolio of strong brands covering most product    
segments around the world which will be maintained and strengthened through the 
combination of the businesses.                                                  

STRONGEST PORTFOLIO OF WORLD CLASS BRANDS                                       

Chrysler Corporation produces cars, minivans, trucks and sports-utility vehicles
for customers worldwide. In North America, the company markets vehicles through 
two divisions: Dodge and Chrysler/Plymouth/Jeep(R). Chrysler invented the       
minivan, and has sold almost 7 million of them worldwide since 1984. Jeep is the
best known sports-utility marque in the world. Financing for Chrysler's dealers 
and customers is provided through the Chrysler Financial Corporation subsidiary.
Chrysler reported its second best year in history in 1997, with unit sales of   
2,886,981 worldwide, sales revenues of $61.1 bn (DM 110 bn) and an operating    
profit of $4.7 bn (DM 8.5 bn).                                                  

With Mercedes-Benz and Smart Cars, Daimler-Benz is the market leader in most    
of the world's premium car markets. In 1997, Daimler-Benz sold an all-time high 
of 715,000 Mercedes-Benz cars and sports-utility vehicles and achieved record   
sales revenues in this division of $30 bn (DM 54 bn) and an operating profit of 
$1.7 bn (DM 3.1 bn). In its commercial vehicle division (Mercedes-Benz,         
Freightliner, Setra, Sterling) Daimler-Benz also achieved a sales record of     
417,000 units worldwide, generating revenues of $21.7 (DM 39 bn). Overall in    
1997, Daimler-Benz reported an operating profit of $2.4 bn (DM 4.3 bn) on       
revenues of $68.9 bn (DM 124 bn).                                               

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The creation of DaimlerChrysler will also allow the growth of Daimler-Benz's    
non-automotive businesses which will continue to pursue their respective        
strategies of expansion. Daimler-Benz Aerospace (Dasa), one of the leading      
European aerospace companies and the German partner in Airbus, contributed      
revenues of $8.5 bn (DM 15.3 bn) in 1997. Daimler-Benz Interservices (debis),   
which includes financial services as well as IT  and telecommunication services,
reported revenues of $8.6 bn (DM 15.5 bn) in 1997. With its rail systems        
business Adtranz, a 50 percent joint venture with ABB, Daimler-Benz is the      
leader in the global rail transportation market. Adtranz contributed revenues of
$1.8 bn (DM 3.2 bn) in 1997. Automotive Electronics (Temic) generated revenues  
of $1.4 bn (DM 2.6 bn), and the diesel engines business is, with sales of $0.9  
bn (DM 1.7 bn) in 1997, one of the world's leading suppliers of high-grade      
propulsion systems for land, marine and rail-bound vehicles.                    

CORPORATE GOVERNANCE REFLECTS STRENGTHS FROM EUROPE AND THE US                  

DaimlerChrysler AG, incorporated in Germany, will have two operational          
headquarters in Stuttgart, Germany, and Auburn Hills, Michigan, USA. The senior 
management will have 18 members drawn from both companies and, for a three-year 
period, will be co-headed by Robert J. Eaton and Jurgen E. Schrempp. There will 
be a Chairmen's integration council with 7 members who will focus on realizing  
the combined strengths of DaimlerChrysler.                                      

The merger will be accomplished through exchange offer and merger transactions  
in which stockholders of both companies will become stockholders of the new     
company. Daimler-Benz stockholders will hold one share of DaimlerChrysler for   
each Daimler-Benz share they now own. Chrysler stockholders will receive 0.547  
of a DaimlerChrysler share for each Chrysler share they now own. The final ratio
will be adjusted to reflect the special pay-out and capital increase transaction
of Daimler-Benz scheduled for June 1998. The transaction is expected to be      
tax-free for both companies and their shareholders, and is currently planned to 
be accounted for as a pooling-of-interests.                                     

Chrysler shareholders will hold approximately 43 percent of the new company, and
Daimler-Benz shareholders will hold approximately 57 percent. DaimlerChrysler   
shares and ADSs will trade on all the same exchanges as do the Daimler-Benz     
shares and ADSs, including the Frankfurt Stock Exchange and the New York Stock  
Exchange. The transaction has been approved by the Chrysler Board of Directors  
and the Daimler-Benz Board of Management. It is subject to approval by the      
shareholders of both companies and the Daimler-Benz supervisory board.          

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as well as regulatory clearance, a tax ruling and opinions and other customary  
conditions, and is expected to be closed by year-end.                           

Credit Suisse First Boston is advising Chrysler, and Daimler-Benz is being      
advised by Goldman Sachs and Deutsche Bank.                                     

Daimler-Benz has filed a registration statement with respect to its global      
offering of rights to acquire Daimler-Benz shares and ADSs with the United      
States Securities and Exchange Commission, but the registration statement has   
not yet become effective. Neither the rights nor the Daimler-Benz shares or     
ADSs which may be acquired upon exercise of the rights may be bought or sold    
until the registration statement becomes effective.                             

CONTACTS:                                                                       

Daimler-Benz AG               Chrysler Corporation                              
Corporate Media Relations     Media Relations                                   

Roland Klein                  Rita McKay                                        
Tel. (+49) 711 17-93635       Tel. (+1) 248 512 2698                            

Eckhard Zanger                Mike Morrison                                     
Tel. (+49) 711 17-93311       Tel. (+1) 248 512 0462                            

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DAIMLER-BENZ
AKTIENGESELLSCHAFT

                                                               Press Information

Daimler-Benz at a Glance                                                        

Daimler-Benz is Europe's largest industrial company and in 1997 generated       
turnover of DM 124 billion and an Operating Profit of 4.3 billion. 23 business  
units, housed in the divisions Passenger Cars, Commercial Vehicles, Aerospace,  
Services and the Directly Managed Businesses (Rail, Automotive electronics and  
Diesel Engines), employ almost 300,000 people worldwide.                        

The prime mission of Daimler-Benz is to increase corporate value in the         
interests of both employees and shareholders, to develop innovative products    
for our customers and to continue the internationalisation of the Group.        

With both divisions Passenger Cars and Commercial Vehicles of the brands        
Mercedes-Benz, Setra, Freightliner, Sterling (in North America) and in future   
Smart, Daimler-Benz's focus is on the automotive sector. Quality and safety of  
the oldest car manufacturer's products are rooted in a tradition of automotive  
excellence which stretches back more than one hundred years. New products like  
the small A-class and the smart are now extending the traditional vehicle       
line-up. On the commercial vehicle side too, Mercedes-Benz has been at          
the forefront of technological advance for many decades and is the largest bus  
and truck manufacturer in the world.                                            

Daimler-Benz Aerospace (Dasa) houses the activities of the Daimler-Benz Group   
in the fields of aircraft, defence and civil systems, space systems and         
aeroengines. As Germany's largest aerospace company, Dasa is today an important 
partner in European and international alliances and is systems manager of       
complex technological projects. With a holding of 37.9 percent, Dasa is the     
German partner in the European consortium Airbus Industrie.                     

Daimler-Benz InterServices, comprising the units Financial Services/Insurance   
Brokerage, IT Services, Telecommunications and Media Services, Trading and Real 
Estate Management, is the services company of the group.                        

Ternic is active in the field of automotive electronics and MTU Friedrichshafen 
builds diesel engines for use in ships and a variety of other applications,     
while Adtranz, a joint venture with ABB, is the world market leader in the      
field of rail systems.                                                          

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[CHRYSLER CORPORATION LOGO]                                  [DAIMLER BENZ LOGO]

------------------------------------------------------------------------------- 
PRESS RELEASE 
------------------------------------------------------------------------------- 

Key figures DaimlerChrysler (pro forma)(1)                                      

                                                        [Enlarge/Download Table]

                                                   Daimler                                                           
                                                    Benz        Chrysler            Pro-forma DaimlerChrysler        
- in Mil USD -                                     1997(2)        1997         1997(2)         1996(2)         1995  
-------------------------------------------------------------------------------------------------------------------- 
                                                                                                                     
Revenues                                          58.317         51.147        130.064        120.474         110.40 

Operating Profit                                   2.404          4.723          7.127          7.615           (448)

Income (loss) before financial income                                                                                
  and income taxes (EBIT)                          2.017          5.583          7.981          7.913            (91)

Income (loss) before financial income,                                                                               
  income taxes, depreciation and amortization                                                                        
  (EBITDA)                                         5.572          8.259         14.831         14.413           n.a. 

Income (loss) before income taxes (EBT)            2.361          4.557          6.918          6.991           (666)

Net income                                         1.762(3)       2.805          4.567          5.063         (1.158)

Earnings per share                                  3.42(3)        4.15                                              

Stockholders' equity                              19.482         11.362         30.854         26.234          23.85 

Total assets                                      76.166         60.418        135.584        118.662         110.47 

Number of employees                              300.168        121.000        421.068        413.029         430.99 

--------------------------                                                      
(1) Pro forma numbers reflect the arithmetic combinations of figures previously 
reported in each company's annual report assuming a business combination
according to the pooling-of-interest method.                            
(2) Exchange rate 1.50 DM/$                                                     
(3) Excluding non-recurring income tax benefits of $2.706 Mil; including such   
benefits net income was $4.455 Mil and 15.59 DM per share.              

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SUPERVISORY BOARD                 

CHRYSLER                        DAIMLER-BENZ                
SHAREHOLDERS                      SHAREHOLDERS                  

                                                           SHAREHOLDER
                                                           COMMITTEE

                            CHAIRMEN'S
                             INTEGRATION COUNCIL

DAIMLERCHRYSLER                       

CO-CEO                      CO-CEO                      

PRESIDENT                         
CHRYSLER CARS &                         
TRUCKS AND                        
INTEGRATION                         

                                                                [Download Table]

                                                                    
   EVP               EVP                 EVP                 EVP    
  GLOBAL         STRATEGY &              CFO            DAIMLER-BENZ
PURCHASING        BUSINESS                               PASSENGER  
                DEVELOPMENT                                 CARS    

                                                                [Download Table]

                                                                       

    EVP                          EVP           EVP                     
  CHRYSLER           EVP       CHRYSLER     CHRYSLER          EVP      
   DESIGN,        CHRYSLER      SALES &   INTERNATIONAL &    CHRYSLER  
EST. AFFAIRS &  MANUFACTURING  MARKETING   LATIN AMERICA    PURCHASING 
    H/R                                      STRATEGY                  
                                                           DAIMLER-BENZ
                                                            PURCHASING 

                                                             CHRYSLER  
                                                            FINANCIAL  


                                                                [Download Table]

                                                               

                EVP           EVP                              
   EVP      DAIMLER-BENZ  DAIMLER-BENZ     EVP       EVP   EVP 
RESEARCH &     HUMAN        SALES &     COMMERCIAL  DASA  DEBTS
TECHNOLOGY   RESOURCES     MARKETING     VEHICLES              

                          DAIMLER-BENZ                         
                              CAR                              
                          DEVELOPMENT                          

                          DAIMLER-BENZ                         
                              CAR                              
                           PRODUCTION                          

-- PRODUCT INTEGRATION                                                          

-- SALES & MARKETING                                                            
INTEGRATION                                                               

-- MANUFACTURING                                                                
INTEGRATION                                                               

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BOARD OF MANAGEMENT 

-----------------------------------    ---------------------------------------- 
CHRYSLER                                 DAIMLER-BENZ   
-----------------------------------    ---------------------------------------- 
* Co-CEO (Ealon)                       * Co-CEO (Schrempp)                      
* President - Chrysler Cars &          * EVP - Daimler-Benz Passenger Cars      
Trucks and Integration (Stalkamp)      (Hubbert)                            
* EVP - Chrysler Sales & Marketing     * EVP - Daimler-Benz Sales & Marketing   
(Holden)                               (Zelsche)                            
* EVP - Chrysler Design, Ext.          * EVP - Research & Technology (Vohringer)
Affairs & H/R (Gale)                 * EVP - CFO (Gentz)                    
* EVP - Global Purchasing (Valade)     * EVP - Strategy & Business Development  
* EVP - Chrysler Purchasing (Sidlik)     (Cordes)                               
* EVP - Chrysler Manufacturing         * EVP - Commercial Vehicles (Lauk)       
(Pawley)                             * EVP - Daimler-Benz Human Resources   
* EVP - Chrysler International &         (Tropitzsch)                           
Latin America Strategy (Cunningham)  * EVP - DASA (Bischolf) - Non-Voting   
                                  * EVP - debis (Mangold) - Non-Voting
-----------------------------------    ---------------------------------------- 

                                                                [Download Table]

                         VEHICLE    NON-VEHICLE   TOTAL
                         -------    -----------   -----
                                                       
Totals: Chrysler             8             -         8 
        Daimler-Benz         8             2        10 
                            --            --        -- 
                            16             2        18 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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Filed on:		5/8/98							8-A12B/A,  SC 13D/A
For Period End:		5/7/98		1
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