Chrysler’s chief financial officer at the time of its 1998 link-up with Daimler-Benz defended the so-called ‘merger of equals’ on Tuesday, saying that the main goal was to maximize shareholder value, Reuters reports.
Gary Valade’s comments were part of the trial of a fraud lawsuit brought by billionaire investor Kirk Kerkorian, who claims that it was no ‘merger of equals’ and was in fact a takeover for which a takeover premium is due.
In effect, he claims that Daimler-Benz got Chrysler on the cheap and that DC boss Jurgen Schrempp let the cat out of the bag in an interview with The Financial Times in 2000 when he admitted that it was never really a merger of equals, but was presented as such.
Kerkorian is seeking more than $1 billion in damages.
Under questioning from a DaimlerChrysler attorney, Valade said US negotiators had obtained the best possible price for Chrysler shareholders from Daimler, however.
“If we had got any more the deal would not have gotten done,” he said in court, according to Reuters.
Lawyers for Kerkorian’s Tracinda Corp. investment company have said the fact that only one American still holds a seat on DaimlerChrysler’s 11-member management board highlights the lopsided nature of one of the biggest merger deals in industrial history.
However, Valade said the interests of shareholders and prosperity of the company were more important than the promise of equal board representation for Americans and Germans made in the “business combination agreement,” according to the Reuters news report.
“Each side had equal power and authority,” Stallkamp told the court on Monday. He added, however, “we, Chrysler, did not exercise well the authority that was built into the deal.”