| Tokyo/Stuttgart - Mitsubishi Motors (MMC) President Katsuhiko Kawasoe
and DaimlerChrysler Chairman Juergen E. Schrempp signed today a Master
Alliance Agreement, Securities Subscription Agreement and Standstill Agreement
for the new alliance between DaimlerChrysler and Mitsubishi Motors. The
alliance includes the design, development, production and distribution
of passenger cars and light commercial vehicles. The alliance will enable
both companies to combine their strengths and benefit on a global scale.
With this alliance, Mitsubishi Motors and DaimlerChrysler will be able
to further expand their world wide operations and in addition DaimlerChrysler
will especially strengthen its operation in Asia.
It has been agreed that DaimlerChrysler will acquire a 34% equity
stake for 225 billion Yen (450 yen per share) in Mitsubishi Motors through
a capital increase. Under the terms of the Standstill Agreement, for
a period of 10 years after its 34 percent equity investment DaimlerChrysler
is not to increase its holding beyond 34 percent of Mitsubishi Motors
stock without the approval of the Mitsubishi Motors board.
The closing of the share purchase is subject to antitrust approvals.
One of the important projects stemming from this alliance is the
joint production of a small car which will start in 2004 with approximately
250,000 vehicles at Netherlands Car B.V. (NedCar). DaimlerChrysler is
to acquire 50 percent of NedCar's shares from Mitsubishi Motors making
NedCar a joint venture in which each company holds an equal 50 percent
equity share.
Other parts of the contracts include the following:
- Mitsubishi Motors may utilize the resources of DaimlerChrysler's
financial services unit in its auto sales activities in North America,
Europe and other regions, once regulatory approvals are obtained.
- An alliance committee will be responsible for overseeing and monitoring
the alliance and will serve as a point of contact for the efficient
promotion of alliance projects. A project steering committee will
also be set up for each collaboration project.
- Three representatives from DaimlerChrysler have already been elected
to the Mitsubishi Motors board of directors: Manfred Bischoff as "Non-Executive
Member" for Strategic Partnerships and alliances in Asia, Steven
A. Torok will serve as an "Executive Member" responsible
for International Operations and Ulrich W. Walker will serve as an
"Executive Member" responsible for Product Planning and
Marketing;
Mr.Torok and Mr.Walker will serve in their positions jointly with
Mitsubishi Motors' executives.
- The alliance does not cover the two companies' commercial vehicle
operations.
- Because MMC has outstanding convertible bonds with a due date of
March 2003, Mitsubishi Motors will issue convertible bonds in a principal
amount of 21.3 billion Yen to DaimlerChrysler Japan Holding, Ltd.
in order to prevent the dilution of DaimlerChrysler's holding of 34
percent if such existing convertible bonds are converted.
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