DaimlerChrysler Settles Class Action Case
DaimlerChrysler has agreed to settle a consolidated class action case pending in the United States District Court for the District of Delaware relating to the 1998 Daimler-Benz/Chrysler merger that created DaimlerChrysler.
Former Chrysler investors have sued the carmaker, claiming the acquisition was billed as a merger of equals, rather than a takeover, in order to keep the price down. Subject to a definitive settlement agreement and to Court approval, DaimlerChrysler will pay the class action plaintiffs $300 million. The plaintiffs’ initial claim was $22 billion.
DaimlerChrysler has applicable insurance policies aggregating approximately $220 million, to which extent it will seek reimbursement of the settlement payment. DaimlerChrysler believes that the class action is completely without merit, but the company has agreed to a settlement, since a local jury could have reached a different conclusion.
GM Plans to Seek Stockholder Approval for Hughes Transactions
In early September, General Motors plans to begin seeking GM stockholder approval of its proposal to split off its wholly owned subsidiary, Hughes Electronics Corp., and sell its approximate 19.8 percent interest in Hughes to News Corp. As part of the transaction, News Corp. would acquire additional Hughes stock from the former GM Class H common stockholders to bring its total holdings to 34 percent. GM expects that it could receive stockholder consent in early October.
Holders of record of GM $1-2/3 par value and GM Class H common stocks as of August 1, 2003 are eligible to vote on these transactions. GM, Hughes and News Corp. continue to seek other necessary approvals in order to close these transactions in late 2003 or early 2004. The transactions remain subject to regulatory clearance under the Hart-Scott-Rodino Act and by the U.S. Federal Communications Commission.
Completion of the transactions is also contingent on other conditions, including the receipt of a favorable ruling from the Internal Revenue Service that the split-off of Hughes from GM would be tax-free to GM and holders of GM Class H common stock for U.S. federal income tax purposes.
Goodyear, USWA Reach Tentative Agreement
The Goodyear Tire & Rubber Co. and the United Steelworkers of America reached a tentative agreement on a new three-year master contract. The tentative agreement must be approved by the local union membership.
Details of the proposed agreement will not be available until the union has the opportunity to share the information with its members. Ratification votes by the more than 16,000 employees at the 14 plants that participate in master bargaining will be scheduled at the facilities in the near future.
Shortly before the original master contract was due to expire on April 19, the company and union agreed to a day-today extension. The parties have been negotiating since the second week of March.
Denso to Establish Shanghai, China, Joint Venture
Denso Corp. will establish a joint venture to produce fuel injection pumps for diesel vehicles with Shanghai Pudong “EV” Fuel Injection Co. Ltd. and Shanghai Dong Song International Trading Co. Ltd. Both companies are based in Shanghai, China. Denso will invest $4.6 million in the joint venture — Shanghai “DV”
Fuel Injection Co. Ltd. — which is owned by Shanghai Pudong “EV” Fuel Injection Co. Ltd. and Shanghai Dong Song International Trading Co. Ltd.
Shanghai “DV” Fuel Injection Co. Ltd. will be renamed Shanghai Denso Fuel Injection Co. Ltd. when it is established October of this year. The company will produce fuel injection pumps for diesel vehicles manufactured by China’s automakers.