DETROIT (AP) — Chrysler Corp. is being acquired by Germany’s Daimler-Benz for more than $38 billion in stock in a deal that will reshape the automaking industry and give both companies a bigger stake in the global market.
The new company, DaimlerChrysler, combines a German luxury car maker with the No. 3 U.S. automaker which once used a “Buy American” slogan and is now known for Jeeps, minivans and light trucks.
The agreement was formally announced Thursday and the deal would rank as the biggest industrial merger ever.
But consumers probably won’t notice a difference, especially in the short term, as the companies vowed to keep their brands and dealerships separate. They also promised no layoffs and said employee numbers likely will grow.
At a joint news conference in London this morning, chairmen of both companies said the deal increases their potential for growth.
“Together we believe the potential is literally unlimited,” Chrysler Chairman Robert J. Eaton said.
No plant closures will result from the merger, Daimler-Benz Chairman Juergen E. Schrempp said.
DaimlerChrysler will be jointly led by Eaton and Schrempp. The new company will have two headquarters — in Auburn Hills, Mich., and Stuttgart, Germany — and will employ 422,000 people worldwide.
The companies said DaimlerChrysler will save $1.9 billion in 1999 by sharing parts and componenets and joining its purchasing, research and development arms. That savings could grow to $3 billion within three to five years, they said.
Directors of both companies have approved the deal, which is expected to be completed by the end of this year if approved by shareholders, the Daimler-Benz supervisory board and government regulators.
The companies together would have had revenues of $131 billion last year — $70 billion for Daimler-Benz and $61 billion for Chrysler.