Dubai Buys $1 Billion of Shares in DaimlerChrysler
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Dubai Buys $1 Billion of Shares in DaimlerChrysler
Dubai Buys $1 Billion of Shares in DaimlerChrysler
Jan. 30, 2005; Bloomberg reported that Dubai bought a $1 billion stake in DaimlerChrysler AG, becoming its third-largest shareholder as the carmaker seeks to reverse three years of declining revenue.
Persian Gulf oil producers such as the United Arab Emirates, Saudi Arabia and Kuwait reaped a windfall last year from record oil prices, boosting their funds to invest. Mohammed Al Gergawi, chief executive of the government-owned Dubai Holding, announced the transaction in a faxed statement today.
DaimlerChrysler Chief Executive Officer Juergen Schrempp is counting on growth at Chrysler to compensate for declining earnings at Mercedes, which generated more than half of DaimlerChrysler's operating profit in 2003. Revenue at the company fell for the past three years.
``This is a real surprise but it should be good news for DaimlerChrysler,'' said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt, who has a ``buy'' rating on the stock. ``It shows there's big interest among institutional investors who find the company attractively valued.''
The shares of DaimlerChrysler trade at 13.33 times expected profit, compared with 21.7 times at Volkswagen AG. The company was created when Daimler-Benz AG agreed to buy Chrysler Corp. in May of 1998 for $43 billion in stock and assumed debts.
``This is a perfect time to buy shares in DaimlerChrysler as the company begins to bear the fruits of its merger,'' Al Gergawi, chief executive of the government-owned Dubai Holding, said in the statement. The U.S.-German automaker ``is now ready to be a leader'' in the industry.
Jan. 30, 2005; Bloomberg reported that Dubai bought a $1 billion stake in DaimlerChrysler AG, becoming its third-largest shareholder as the carmaker seeks to reverse three years of declining revenue.
Persian Gulf oil producers such as the United Arab Emirates, Saudi Arabia and Kuwait reaped a windfall last year from record oil prices, boosting their funds to invest. Mohammed Al Gergawi, chief executive of the government-owned Dubai Holding, announced the transaction in a faxed statement today.
DaimlerChrysler Chief Executive Officer Juergen Schrempp is counting on growth at Chrysler to compensate for declining earnings at Mercedes, which generated more than half of DaimlerChrysler's operating profit in 2003. Revenue at the company fell for the past three years.
``This is a real surprise but it should be good news for DaimlerChrysler,'' said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt, who has a ``buy'' rating on the stock. ``It shows there's big interest among institutional investors who find the company attractively valued.''
The shares of DaimlerChrysler trade at 13.33 times expected profit, compared with 21.7 times at Volkswagen AG. The company was created when Daimler-Benz AG agreed to buy Chrysler Corp. in May of 1998 for $43 billion in stock and assumed debts.
``This is a perfect time to buy shares in DaimlerChrysler as the company begins to bear the fruits of its merger,'' Al Gergawi, chief executive of the government-owned Dubai Holding, said in the statement. The U.S.-German automaker ``is now ready to be a leader'' in the industry.
As 3rd largest share-owners, maybe Dubai will push and lobby for larger vehicles and gas guzzlers within DC so they can continue to make a killing off their oil business
. Hehe.I've always wondered, what kind of influence can a large share-holder have over product development? In the above sentence, i was kind of half-kidding about dubai and them lobbying for larger vehicles within DC, but it probably isn't that far from the truth since Dubai is oil-rich industry and SUV's and such gas-guzzlers are probably their favorites since they continue to power their industry. I'm sure they are not fans of Hybrids and little econo-cars.
Anyways, interesting transaction here. Guess that makes Chrysler even less American (now part german, with a bit of middle-east mixed in).
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Re: Dubai Buys $1 Billion of Shares in DaimlerChrysler
The big three have always been 'in bed' with the oil industry (sellers and refiners). It's why we still have gasoline engines, decades after the first oil crunch.
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Re: Dubai Buys $1 Billion of Shares in DaimlerChrysler
Originally Posted by steve2002
The big three have always been 'in bed' with the oil industry (sellers and refiners). It's why we still have gasoline engines, decades after the first oil crunch.
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Re: Dubai Buys $1 Billion of Shares in DaimlerChrysler
Originally Posted by steve2002
The big three have always been 'in bed' with the oil industry (sellers and refiners). It's why we still have gasoline engines, decades after the first oil crunch.
I was really suprised to see this. I think we can agree that a gas crisis will not bring this hp war to it knees this time.
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