LONDON - The merger of Daimler-Benz and Chrysler is expected to pass its final hurdle on 26 October when Daimler reveals how many of its shareholders have exchanged their shares for DaimlerChrysler shares.
Daimler is aiming for 90 percent acceptance, although it only needs to achieve 75 percent. Once 75 percent are exchanged, the remainder are converted automatically.
Lawsuits launched by disgruntled Daimler shareholders will not affect the outcome, or the progress of the merger, said Daimler-Benz spokesman Roland Klein.
A shareholder activist group called Association for Shareholder Democracy (VFA) claims the merger agreement undervalues Daimler shares, and has asked a German court to re-assess the valuation of the two companies.
The VFA said it hoped to win between DM20-DM40 ($11-$22) in cash for each share not exchanged before the deadline of 23 October. But even if a judge agrees, the process could take years.
'If only ten percent of (Daimler) shareholders do not swap their shares voluntarily, you end up with a figure of between DM1 billion and DM2 billion,' VFA spokesman Jochen Knoesel said.
But Daimler CFO Manfred Gentz said the company had spent months investigating all the legal requirements of the merger, and 'no technical mistakes (have been made) which can prevent the merger.'
Daimler is valued at DM110 billion and Chrysler at DM82.3 billion; Daimler shareholders will own 58 percent of the new company.
Four individual shareholders have also filed lawsuits alleging violation of formalities at Daimler's shareholder meeting on 18 September.
Daimler wants at least 90 percent of shares converted voluntarily, because the company will otherwise have to account for goodwill charges of $35 billion over the next 40 years. If more than 90 percent of shares are exchanged, each Daimler shareholder will receive a bonus share for every 200 shares exchanged. This is because DaimlerChrysler can use tax benefits provided by the 'pooling of interest' accounting procedure.
Daimler-Benz has at least 800,000 shareholders, but 80 percent of shares are held by institutions rather than individuals.
Chrysler shareholders will receive 0.6235 of a DaimlerChrysler share for each Chrysler share.