DaimlerChrysler reportedly has insisted that no strings were attached to Dubai’s arrival as a big shareholder and said it had not agreed to make vehicles in the emirate that spent $US1 billion on Daimler stock.
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“There is no decision linked to Dubai’s arrival for us to produce in the region,” a spokesman for the German-American carmaker told Reuters, dismissing rumblings in the share market that there may be more to the deal than meets the eye.
DaimlerChrysler stock has risen, but analysts reportedly said a variety of factors was at work, including lower oil prices and talk of a favourable settlement with Japanese affiliate Mitsubishi Motors Corp. over defect cover-ups at the Mitsubishi Fuso truck and bus unit.
In a statement, the emirate’s Dubai Holding investment vehicle said it had paid $1 billion to become DaimlerChrysler’s third-largest shareholder, Reuters said.
Industry sources told the news agency that neither Deutsche Bank AG nor the Gulf state of Kuwait – DaimlerChrysler’s biggest and second-largest shareholders – had reduced their stakes of 10.4 and 7.2%, respectively. Dubai now has around 2%, the sources reportedly said.
Reuters said the deal sparked talk that DaimlerChrysler could follow the lead of Volkswagen AG, Europe’s biggest carmaker, which plans to build trucks from the year 2006 in Abu Dhabi, capital of the United Arab Emirates that includes Dubai.
Mubadala Development Co. of the Abu Dhabi government took part in a VW-led consortium that bought European vehicle-leasing company Leaseplan, so ties are close despite last year’s failed attempt to sell 10% of its own treasury shares to the emirate, the report added.
Dubai reportedly said it bought the DaimlerChrysler stake because the group was set to reap the fruits of the 1998 merger of Daimler-Benz and US carmaker Chrysler and given the quality of DaimlerChrysler management, but some analysts were not satisfied with this, according to Reuters.
“They say it is a good company and the Chrysler strategy is panning out, but I don’t think that is it,” one told the news agency.
“In my view the fundamentals could support an investment decision by itself but you never know with people like Daimler,” a banker who follows the sector closely told Reuters.
Michael Raab, an analyst at Bank Sal. Oppenheim, reportedly played down the conspiracy theories. “There are always people out there believing there is more to follow. I personally believe there is not more to follow,” he told Reuters.
The news agency said that DaimlerChrysler stock has underperformed peers by around 3% this year and by about 8.5% since the start of 2004 due to worries that the cash cow Mercedes Car premium vehicle group could suffer this year amid currency headwinds and the cost of remedying quality issues.
