GERMANY: Daimler settles with former AEG shareholders
Following a final verdict reached last month by the higher regional court in Frankfurt, Daimler is to increase the settlement and compensation to be made to the former AEG shareholders.
The domination and profit and loss transfer agreement between the former Daimler-Benz and AEG, dating back to 1988, specified an exchange ratio of 5 AEG shares for one Daimler-Benz share. In its verdict of 17 November, 2009, the court specified an appropriate ratio of 2.9 AEG shares for one old Daimler-Benz share.
The court's verdict will result in a maximum obligation for Daimler to supply 4.3m Daimler shares and a maximum amount of EUR150m (US$225m) in cash for dividends and compensation payments. The actual amount will depend, however, upon how many claims are made by eligible former AEG shareholders.
Daimler has recognised provisions in its balance sheet to satisfy the claims, but the provisions are now being reviewed once again for the year-end financial statements. Daimler said it intends to use treasury shares to meet these obligations.
From the share buyback program carried out in 2008, Daimler currently holds 37.1m own shares, which were originally acquired for the purpose of redemption without reducing the share capital and possibly also to serve the stock option plan.