DaimlerChrysler to acquire 100% of Detroit Diesel

DETROIT (July 20, 2000) — In a deal that would create the world’s largest maker of diesel engines for medium- and heavy-duty trucks, DaimlerChrysler AG said it had an agreement to buy the 78.7% of Detroit Diesel Corp. that it does not already own.

DaimlerChrysler said it would pay $423 million cash for Detroit Diesel’s outstanding shares. At $23 each, the price is 30% more than Tuesday’s closing price of 17-5/8 on the New York Stock Exchange.

“While acknowledged as the number one commercial vehicle producer worldwide, we are also now the new lead manufacturer of heavy- and medium duty on-highway diesel engines in the world,” said DaimlerChrysler Chairman Juergen Schrempp.

Detroit Diesel will become part of a new business unit called Commercial Vehicles Division of DaimlerChrysler, which includes an off-highway engine manufacturer and the Mercedes-Benz engine group.

The announcement comes one day after DaimlerChrysler announced plans to purchase Kelowna, B.C.-based truckmaker Western Star Trucks Holdings Ltd. for $456 million US. DaimlerChrysler builds heavy trucks in North America through its Freightliner LLC group, based in Portland, Ore.