Mergers, Acquisitions, Alliances and Synergies Case Study

Case Title:

Why Daimler Sold Chrysler?

Abstract:
Daimler Benz AG, one of the leading German automobile manufacturers and Chrysler Corporation of US joined hands in a transnational merger in 1998 for $36 billion. Daimler Benz, expected to gain access to North American markets through this deal while Chrysler hoped that it can come out of its losses and pursue global expansion. But, the relationship between the two went sour due to differences in managerial decision-making and organisational culture. Apart from difficulties in achieving synergies, Chrysler suffered further loss in 2000. Chrysler again incurred losses in 2003 and in 2006. In the wake of losing market share and stock prices, Daimler started looking for a strategic partner or a probable buyer to turnaround Chrysler units in America.

Pedagogical Objectives:

• To analyse Merger dynamics
• To analyse Factors influencing successful mergers
• To discuss Global trends in automobile industry (US in particular).

Keywords : Daimler Chrysler Merger; US Automobile Industry; Transplant Operations; Toyota; Big 3; Mercedes Benz; Management Culture; Cerberus Capital; Mergers,Acquisitions,Alliances Case Study; Crossover vehicles; SUVs; Dieter Zetsche; Juergen Scrempp; Toyota Prius; John Snow; United Automobile Workers