DaimlerChrysler
To Sell Rest of Mitsubishi Stake
By STEPHEN POWER
Staff Reporter of THE WALL STREET JOURNAL
November 12, 2005
FRANKFURT -- DaimlerChrysler AG Friday said it is selling its entire 12.4% stake in Mitsubishi Motors Corp., an investment that has been a source of friction among DaimlerChrysler executives.
The German-U.S. auto maker said the sale would boost its revenue for 2005 by €500 million ($588 million). DaimlerChrysler said Goldman Sachs is in the process of selling the stake into the market. A person familiar with the matter said the transaction is likely to be completed by the end of the day.
DaimlerChrysler also said that Ruediger Grube, a member of DaimlerChrysler's management board responsible for the company's relationship with Mitsubishi, would resign from Mitsubishi's
Separetely, DaimlerChrysler said public prosecutors' investigations against Mr. Grube and Hartmut Schick for alleged insider trading have been ended without finding any evidence. The public prosecutors office wasn't immediately available for comment.
The two auto makers said the sale won't affect joint ventures between the companies, which include the development and production of engines, the shared use of vehicle architecture and the joint production of passenger cars, sports-utility vehicles and pickup trucks in Europe, North America, China and South Africa. DaimlerChrysler also said the two companies "plan to renew and extend current projects which are mutually beneficial."
Nonetheless, the company's investment in Mitsubishi has been a source of friction at the company's highest levels. Last year, DaimlerChrysler cut off further investment in the ailing Japanese car maker, after a bitter boardroom debate that pitted Chief Executive Juergen Schrempp and Mr. Grube against most of the company's other management board members, including the man who is poised to succeed Mr. Schrempp on Jan. 1, Dieter Zetsche. Mr. Schrempp had advocated further talks with Mitsubishi, according to people familiar with the matter.
With Mr. Schrempp on his way out and Mr. Zetsche poised to take over after a successful turnaround of the company's Chrysler division, a growing number of DaimlerChrysler investors think the company's stock might have legs. Mr. Schrempp preached shareholder value during his 10-year run as CEO but failed to deliver on his promises to wring vast efficiencies by fostering cooperation between the auto maker's German and U.S. operations. Instead, with its share price down, DaimlerChrysler's market capitalization has fallen to $50.6 billion, down nearly 40% from the $84.1 billion reached at the time of the 1998 merger that created the German-American car maker.
"It's the end of a world company for the near future," said Martin Sachsenmaier, a fund manager at Frankfurt-Trust Investment GmbH in Frankfurt. "This shows a focus [by DaimlerChrysler] on key competence and reducing losses. That's what investors want to see."
Shares of DaimlerChrysler gained 1.8% to €42.72 apiece in Frankfurt trading at midday Friday.
VW Names Neumann as Personnel Director
Separately, Volkswagen AG said Horst Neumann has been named its new director of personnel. Mr. Neumann, who currently oversees human resources as a board member for Audi AG, VW's luxury arm, will assume the new post on Dec. 1.
Mr. Neumann replaces Peter Hartz, who left in July amid ongoing investigations into bribery and kickback allegations at Europe's biggest car maker. Volkswagen also said Friday that it would release details on the final report of KPMG International investigation into the claims but set no timetable.
Shares of the Wolfsburg-based company were up 1.4% at €45.40 apiece in Frankfurt trading. |
