BERLIN (Bloomberg) -- Daimler AG won an appeals court ruling overturning a 230 million-euro ($324 million) award to former Daimler-Benz AG shareholders who claimed they weren't adequately compensated in the 1998 merger with Chrysler Corp.
The shareholders' interests were taken care of when the companies negotiated the deal, which gave 1.005 shares of DaimlerChrysler AG for each share of the old Dailmer-Benz AG, the Higher Regional Court in Stuttgart, Germany, said in an Oct. 15 e-mailed statement. Shareholders at a Daimler-Benz meeting overwhelmingly approved the merger, the court said.
“If the agreement is result of a negotiation process which is backed by a large majority of shareholders, that's the best warranty that the executives took adequate care of the economic interests of their respective investors,” the court said. “A court has only limited powers of review in these cases.”
The suit stems from the $36 billion takeover of Chrysler, which created DaimlerChrysler AG. The merger was unwound 2007 with the sale of 80.1 percent of the U.S. division to Cerberus Capital Management LP. Daimler later dropped “Chrysler” from its name.
Chrysler ended up filing for bankruptcy last year and a government-sponsored reorganization allowed Italy's Fiat S.p.A. to take control of the automaker.
The tribunal's decision overturned a lower court ruling that gave investors an additional 22.15 euros per share.
At a 2008 court hearing, CEO Juergen Schrempp denied allegations that Daimler-Benz downplayed its value when negotiating its 1998 merger with Chrysler to facilitate the transaction.
Schrempp told the court that Daimler-Benz's value was determined by independent auditors according to German merger rules. He denied there were any orders to find a certain value to downplay Daimler-Benz's worth to make the merger possible.
The lower court had argued that the amount of shares the plaintiffs received in the merged company under the formula didn't match the value of the stakes they had in Daimler-Benz.