Value creation and challenges of an international transaction The DaimlerChrysler merger |
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| Institution: | 1. Department of Surgery, University of Manitoba, Winnipeg, Manitoba, Canada;2. Department of Pulmonology and Allergology, University Children''s Clinic, Skopje, Macedonia;3. College of Nursing, University of Saskatchewan, Saskatoon, Canada;4. Canadian Center for Health and Safety in Agriculture, University of Saskatchewan, Saskatoon, Canada;5. Division of Respirology, Department of Medicine, McMaster University, Hamilton, Canada;6. Department of Medicine, University of Saskatchewan, Saskatoon, Canada;1. Molecular Science and Nano-Materials Lab, Institute for Computational Science and Technology, SBI Building, Quang Trung Software City, Tan Chanh Hiep Ward, District 12, Ho Chi Minh City, Viet Nam;2. University of Science, Vietnam National University – HCMC, 227 Nguyen Van Cu, Ward 4, District 5, Ho Chi Minh City, Viet Nam;3. International University, Vietnam National University – HCMC, Quarter 6, Linh Trung Ward, Thu Duc District, Ho Chi Minh City, Viet Nam;1. Obesity Research Center, Research Institute for Endocrine Science, Shahid Beheshti University of Medical Sciences, P.O. Box: 19395-4763, Tehran, Iran;2. Nutrition and Endocrine Research Center, Research Institute for Endocrine Science, Shahid Beheshti University of Medical Sciences, Tehran, Iran;3. Department of Public Health, Shahid Beheshti University of medical science, Tehran, Iran;4. Endocrine Research Center, Research Institute for Endocrine Science, Shahid Beheshti University of Medical Sciences, Tehran, Iran |
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| Abstract: | Globalization is a buzzword in international finance and economics. On May 6, 1998, in London, Daimler-Benz of Germany signed a merger agreement with Chrysler Corporation of the United States. Using the DaimlerChrysler merger as a case study, this paper focuses on value creation and analysis of various issues in an international transaction. The market responded very favorably to this merger, and we review the potential sources of value creation in the merger as well as outline the steps undertaken to consummate the merger. We also consider an interesting question: Can a company truly be “global”? Differences in corporate culture, compensation policies, ownership structure, and the legal environment pose significant challenges to all mergers but especially international business combinations. Important post-merger events, such as the Standard & Poor's decision not to include DaimlerChrysler in the S&P500 Index and the clash of corporate cultures and compensation schemes, have presented major roadblocks to it becoming a truly global company. |
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