FRANKFURT (Reuters) - DaimlerChrysler AG said on Friday it had agreed a $300 million settlement of a U.S. class action lawsuit relating to Daimler-Benz's 1998 takeover of Chrysler.
"Although DaimlerChrysler believes that the class action is completely without merit, the company has agreed to a settlement, since a local jury could have reached a different conclusion," the company said in a statement.
Former Chrysler investors, including major shareholder Kirk Kerkorian, have sued the world's fifth biggest carmaker, claiming the acquisition was billed as a merger of equals, rather than a takeover, in order to keep the price down.
The suits were filed after DaimlerChrysler Chief Executive Juergen Schrempp told the Financial Times that he had always meant to relegate Chrysler to a division of the group.
DaimlerChrysler said in a statement that the plaintiffs had been seeking damages of $22 billion in the class action case pending at the U.S. District Court in Delaware.
The settlement was subject to a definitive agreement and to court approval, the company said, adding that it would seek $220 million from its insurers.
"The decision to resolve this litigation was approved by the company's supervisory board and enables the company to continue concentrating its resources on its business agenda," it said.
DaimlerChrysler said the Delaware settlement did not affect a separate case filed by Kerkorian's investment company Tracinda and that it would continue to contest that suit.
"DaimlerChrysler believes all claims against it relating to the 1998 merger, including those in the Tracinda case, are without merit and the company remains committed to a vigorous defense of this case," it said.
A U.S. judge struck down part of DaimlerChrysler's argument for the dismissal of the $8 billion Tracinda claim in June, saying investors could not have suspected the so-called merger of equals was a takeover.