Schrempp appears in shareholder trial
10 February 2004
WILMINGTON – DaimlerChrysler AG’s top executive took the stand again this week in a multibillion-dollar lawsuit that charges the merger of Daimler-Benz and Chrysler Corp. in 1998 was planned as a takeover all along.
Juergen Schrempp, on the stand for the second time in the trial in District Court in Wilmington, Delaware, said the deal was far more a merger of equals than a takeover.
Schrempp was questioned over three hours by plaintiff’s lawyer Terry Christensen, who focused mostly on documents that have surfaced since Schrempp’s first time on the stand in December. The documents contain handwritten notes made by former Chrysler chief financial officer Gary Valade in 1998.
The lawsuit was filed by billionaire investor Kirk Kerkorian and his investment company Tracinda, which accuse Daimler-Benz of misleading US investors by camouflaging the takeover as a merger. A takeover would have added a USD 10 billion merger premium to the USD 36 billion deal. Kerkorian’s suit seeks more than USD one billion in damages.
The judge hearing the lawsuit suspended testimony December 16 when lawyers for the automaker came forth with 61 pages of Valades’ documents that should have been turned over to plaintiff’s attorneys much sooner.
Asked about the documents, Schrempp numerous times had to decline to try to interpret the notes or explain that he could only guess what they meant.
Schrempp stressed that a meeting during which some of the notes were taken were brainstorming sessions and were not formal negotiations, as Kerkorian asserts. Christensen said the documents showed Daimler-Benz early in the process considered the transaction a takeover and not a merger of equals. He said Daimler-Benz then tried to veil its intensions because of psychological reasons.
Christensen said even the process of naming the new company showed that the transaction was takeover. He recounted that Schrempp declined the US proposal to name the company Chrysler-Daimler- Benz. Although both the names Daimler and Benz were in the name, it was more important to Schrempp that the name Daimler come first. Schrempp confirmed that Christensen was correct.
Subject: German news