Daimler Sells Aabar a 9.1% Stake for $2.7 Billion

[bmer]

By Chris Reiter

March 22 (Bloomberg) -- Daimler AG, the world’s second- largest maker of luxury cars, will sell 1.95 billion euros ($2.7 billion) of shares to Abu Dhabi’s Aabar Investments PJSC, making it the company’s largest shareholder.

Aabar will buy 96.4 million new Daimler shares for 20.27 euros a piece, the Stuttgart, Germany-based automaker said today in an e-mailed statement. The price equates to a 5 percent discount to Friday’s close of 21.34 euros.

“We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy,” Daimler Chief Executive Officer Dieter Zetsche said in the statement. “We look forward to working together to pursue joint strategic initiatives.”

Daimler, the maker of Mercedes-Benz cars and trucks, is cutting car production in Germany and closing truck plants in North America to counter the worst auto-industry crisis in decades. The company, also the world’s largest truck maker, lost 1.53 billion euros in the fourth quarter, burdened by declining sales and expenses related to former U.S. arm Chrysler LLC.

Aabar’s stake will total 9.1 percent after the capital increase, exceeding Kuwait’s stake of 6.9 percent, Daimler said.

Aabar’s largest shareholder is International Petroleum Investment Co., owned by the government of Abu Dhabi.

Full article: Daimler Sells Aabar a 9.1% Stake for $2.7 Billion (Update2) - Bloomberg.com

 

[bmer]

Daimler Press Release:

Abu Dhabi’s Aabar Investments to become a major Daimler shareholder

Stuttgart, Mar 22, 2009

• Daimler increases share capital by 10% with exclusion of subscription rights of existing shareholders
• After acquiring all new shares, Aabar will hold 9.1% of the new share capital
• Issue price of €20.27 per share close to the current market price
• Total investment of €1.95 billion further strengthens Daimler’s sound capital base and offers additional flexibility to invest in new automotive technologies
• Platform for joint strategic initiatives established
• Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG: “We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy. We look forward to working together to pursue joint strategic initiatives.”
• HE Khadem Al Qubaisi, Chairman of Aabar: “Daimler is an iconic brand and a financially strong company with a reputation for excellence worldwide. We are delighted to having received the opportunity to be making this investment.”

Stuttgart – Daimler AG (stock-exchange abbreviation DAI) welcomes Aabar Investments PJSC (Aabar) of Abu Dhabi, as a major investor. Daimler increases the share capital by approx. 10% with exclusion of subscription rights of existing shareholders. After acquiring all new shares, Aabar will hold approx. 9.1% of the new share capital. The capital increase was approved by Daimler’s Supervisory Board today.

Aabar is an investment company headquartered in Abu Dhabi and is listed on the Abu Dhabi Securities Exchange. It directly invests in various sectors including energy, infrastructure, real estate, automotive and financial services companies. Its largest stakeholder is the International Petroleum Investment Company (IPIC), which in turn is wholly owned by the Government of the Emirate of Abu Dhabi.

The capital increase will be carried out by issuing 96,408,000 new registered no par value shares of Daimler’s Authorised Capital approved by the Annual Shareholders´ Meeting of April 9, 2008 in exchange for cash contributions. Existing shareholders’ rights to subscribe to these new shares are excluded. The issue price of the shares is €20.27 per share, resulting in an equity contribution for Daimler of €1.95 billion.

Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy. We look forward to working together to pursue joint strategic initiatives.”

Khadem Al Qubaisi, Chairman Aabar: “Daimler is an iconic brand and a financially strong company with a reputation for excellence worldwide. We are delighted to have the opportunity to make this investment and are excited by the commercial potential of our partnership. We believe that our future cooperation will be beneficial for Aabar and create social and economic benefits for Abu Dhabi and the United Arab Emirates. We look forward to working with Daimler to fully realize these opportunities.”

The future cooperation will focus on joint initiatives in the following areas:

• Electric vehicles with a particular focus on projects aiming at the reduction of CO2-emissions
• Development and/or production of innovative compound materials to be used in automotive manufacturing
• Social projects such as the establishment of a training centre in Abu Dhabi to educate young talent for positions in the automotive industry

The cash inflow from the capital increase of €1.95 billion will further improve Daimler’s sound financial position. At the end of 2008, the equity ratio of Daimler’s industrial business was 42.7% and the equity ratio of the entire Daimler Group was 24.3%.

The investment complements a broad range of initiatives already undertaken by Daimler to react to the changing market environment, further strengthens its solid capital base and gives even greater flexibility to invest in innovative automotive technologies during a period of economic uncertainty and macroeconomic instability.

With Abu Dhabi and Kuwait, Daimler will have two major shareholders in the future. Kuwaithas held an equity interest since 1974. Following the capital increase, the equity interest held by Kuwait will amount to 6.9%.

 

[LaArtist]

super love this..
now MB can breath abit freely and do what they do best

 

[EnI]

Daimler AG issues fresh shares: new biggest single shareholder announced!

Daimler Sells Aabar a 9.1% Stake for $2.7 Billion

By Chris Reiter

March 22 (Bloomberg) -- Daimler AG, the world’s second- largest maker of luxury cars, will sell 1.95 billion euros ($2.7 billion) of shares to Abu Dhabi’s Aabar Investments PJSC, raising cash as it grapples with the deepening global recession and gaining a long-term shareholder.
Aabar will buy 96.4 million new Daimler shares for 20.27 euros apiece, the Stuttgart, Germany-based automaker said in a statement today. The price equates to a 5 percent discount to Friday’s close of 21.34 euros.
“It’s a win-win situation for both companies,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen. “It’s an attractive price for Abu Dhabi, and it’s good for Daimler to raise cash and get a long-term investor, because the next two years will be very hard.”
In the span of a few months, Daimler has gone from a buyer of its shares to a seller, reflecting the sharp turnaround in the auto industry. The automaker announced plans to buy 6 billion euros of its own stock on June 17. At the time, its stock traded at 45 euros. The company then halted the program in October, as financial crisis began to stifle demand.
Daimler, the maker of Mercedes-Benz cars and trucks, is countering the worst auto-industry crisis in decades by cutting car production in Germany and closing truck plants in North America. The company, also the world’s largest truck maker, lost 1.53 billion euros in the fourth quarter, burdened by declining sales and expenses related to former U.S. arm Chrysler LLC.
Major Shareholder
“We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy,” Daimler Chief Executive Officer Dieter Zetsche said in the statement. “We look forward to working together to pursue joint strategic initiatives.”
Daimler has underperformed its nearest competitor Bayerische Motoren Werke AG, the No. 1 luxury carmaker. Daimler’s shares have fallen 20 percent this year, while BMW rose 1.7 percent.
Aabar’s stake will total 9.1 percent after the capital increase, exceeding Kuwait’s stake of 6.9 percent and making it the largest shareholder, Daimler said. The investment fund’s biggest stakeholder is International Petroleum Investment Co., owned by the government of Abu Dhabi. Aabar approached Daimler about the investment, said Thomas Froehlich, a spokesman for the automaker in Stuttgart.
‘Iconic Brand’
“Daimler is an iconic brand and a financially strong company,” said Aabar Chairman Khadem al-Qubaisi in the statement. “We are delighted to have the opportunity to make this investment and are excited by the commercial potential of our partnership.”
Daimler and Aabar intend to cooperate on the development of electric vehicles and new materials for auto production as well as establish a training center in Abu Dhabi.
Aabar agreed in December to pay 307 million Swiss francs ($272 million) and assume 100 million francs in debt to take over the Swiss-based private banking unit of American International Group Inc. Aabar was advised on the Daimler investment by Goldman Sachs, spokesman Ben Burton said.

 

[SCOTT27]

Uh-oh.

 

[Tarek]

Repost tine.

 

[Centurion]

This is a good alternative recession relief rather than opting for the popular government bailout that comes with a million strings attached.

 

[coolraoul]

Good news. Now, Daimler has around 15% of its shares in hands of long-term investors. Arabs love Daimler it seems!

Aabar said, according to Automobilwoche, that they don't exclude to take even more shares from Daimler in the future than their current 9.1%, but that they have no intention to have a seat in the Supervisory Board right now.
They intend to meet the Daimler heads regularly, but not to influence them by any means.

 

[Tarek]

^Yeah,now lets see some insane Benz machines

 

[martinbo]

Guys, can we do a thread merge with Eni's thread on the same issue?

http://www.germancarforum.com/autom...new-biggest-single-shareholder-announced.html

 

[bmer]

Threads merged.

 

[EnI]

Repost tine.

Ooops!

 

[Mr Robert]

So, I guess there is no pressure on Mercedes' behalf regarding the joint venture with BMW?

 

[Centurion]

So, I guess there is no pressure on Mercedes' behalf regarding the joint venture with BMW?

There still is pressure. €1.95 billion is not a lot of money for a giant corporation like Mercedes. All that money is good for is solving short term problems like cash flow relating to the economic slow down. This is no more than a relief for 2009, in the long run MB will have to ally with BMW in some areas of production and development.

 

[coolraoul]

^^Totally agree.
This is good news because it stabilizes Daimler's ownership structure (with now roughly 15% being stable and long-term oriented), it gives an extra-cash that is always welcomed when the sales are plunging.

But Daimler still needs to lower purchase-price, R&D costs, developments costs because of their relatively small size compared to Lexus using Toyota's or Audi using PAG's enormous power.

The Daimler-BMW cooperation is just every bit as desperately needed as before, for both of them.

 

[coolraoul]

According to Automobilwoche, Aabar (Abu Dhabi's hedge fund) is willing to take more shares from Daimler.

They are said to want to take slightly over 20% of Daimler !!

It's not a bad news, if they don't interfere with Dimler's management (because they'll have seats in the Board with 20%).

 

[Wolfgang]

Daimler, Aabar, and Algerian government sign memorandum of understanding with regard to the production of trucks and buses in Rouiba

Support of economic cooperation between Germany, Algeria, and the United Arab Emirates

• Work-study training program in line with German model
• Daimler will supply Algerian joint venture with parts and components

On March 22, 2011, Daimler AG, the Algerian government, and Aabar Investments PJS signed a memorandum of understanding with regard to the assembly of trucks and buses. The project encompasses the supply of vehicle parts to Algeria for local assembly in Rouiba. Daimler will provide technology and supply parts and components on a contractual basis.

The Abu Dhabi-based company Aabar Investments PJS and the Algerian government will establish a joint venture in Rouiba, Algeria, that will be responsible for the operational management of the vehicle assembly facility.

Says Peter Alexander Trettin, the Daimler executive responsible for the sale of Mercedes-Benz vehicles in Central and Eastern Europe, as well as Africa and Asia: “We are strengthening our presence in North Africa and exploiting the Algerian market’s growth potential for vehicles of all kinds.

The project also helps us to make a positive contribution to Algeria’s economic development. In this way, Daimler is creating new jobs in Algeria and safeguarding jobs at our German plants.”

Daimler and Aabar had already signed an initial memorandum of understanding with the Algerian government on July 28, 2009. In line with this agreement, Daimler will supply modules to an assembly plant in Tiaret, Algeria, for the production of Sprinters, Unimogs, and G-Class vehicles.

Through its projects in Algeria, Daimler is supporting the economic cooperation between Germany and Algeria that was agreed on in the protocol of the first German-Algerian Joint Economic Commission, which was signed on March 9, 2011 by the German and Algerian governments. In this context, a training program will be carried out in cooperation with the Algerian government and Aabar in line with Germany’s work-study training system.

Aabar owns a 9 percent share in Daimler AG, which makes it the company's largest individual shareholder. For Daimler and its major shareholder Aabar, the activities in Algeria constitute another joint project for promoting close cooperation.

Source: Daimler