Daimler-Chrysler- Case Study
Corporate marriages have become so problematic in recent times that it no longer generates a shocking response from the analysts at Wall Street if a merger fails. We witnessed some of the classic merger downfalls in 1990s when many large companies decided to merge their businesses mainly because of poor economic conditions. Because of these failures and the many stories surrounding rapid collapse of corporate marriages, the public along with Wall Street analysts more or less has stopped reacting to such news. Still, the news that Daimler-Chrysler merger was facing deep problems generated a massive response from Wall Street observers who were keenly anticipating some positive news. Everyone had believed that it was a 'merger of the equals' since both companies ranked very high in their respective areas of expertise.
Things should have worked out well because there were apparent no clash of interests. Daimler Benz was basically a well-known producer of luxury cars and Chrysler was a truck company that excelled in minivans and sport utilities. On the surface everything looked smooth. The $40 billion merger was to create the third largest automobile company in the world after GM and Ford. This was in itself a huge achievement for the two firms that couldn't hope to beat the market leaders on their own. CEOs of the two companies Jurgen Schrempp of Daimler-Benz and Eaton of Chrysler knew their firms had much to gain from the merger. The conditions in the industry had not been encouraging in the past few years and demand was sluggish. Secondly with the merger, both companies could easily gain access to both European and Americans markets.
In short, "prospects for the merger looked good. Because of the two companies' complementary product ranges, regional concentrations, and capabilities, its logic was acclaimed by both investors and auto industry analysts. The extent of the companies' pre-merger and post-merger planning...
Daimler A Long and Tangled History The Daimler car company, under various different names and throughout various configurations, has been around almost as long as the history of the automobile itself. It has seen good times -- including some very good times -- as well as some very troubled times. While Daimler, like any other company, has been to some extent purely at the mercy of chance and external forces, it has
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