By
The Associated Press
DETROIT - Billionaire investor Kirk Kerkorian filed a $9 billion lawsuit yesterday in an attempt to break up the merger that created DaimlerChrysler, accusing the automaker's German management of falsely telling stockholders the deal would be a merger of equals.
In the federal lawsuit filed in Delaware, Kerkorian's Tracinda Corp. said it never would have voted for the $34 billion merger if it had been presented as a takeover of Chrysler Corp. by Germany's Daimler-Benz.
A DaimlerChrysler spokeswoman reached in Frankfurt said she had not seen the lawsuit and could not comment.
More than a dozen senior Chrysler executives have resigned, retired or been forced out since the deal became final in 1998. On Nov. 17, Chrysler's American president was fired by Schrempp and replaced with a veteran Mercedes-Benz executive from Germany.
Kerkorian is DaimlerChrysler's third-largest individual shareholder.
"To close one of the largest transactions in the history of the automotive industry, defendants Daimler-Benz AG and DaimlerChrysler AG blatantly lied to all concerned in a scheme masterminded by defendant Juergen Schrempp," the complaint said, according to a copy obtained by The Detroit News. Schrempp was chairman of Daimler-Benz and is now chairman of DaimlerChrysler.
In a statement, Tracinda cited comments Schrempp made recently to the Financial Times that he never intended DaimlerChrysler to be a merger of equals, but instead secretly planned to make Chrysler a division of the German parent company.
Daimler-Benz ''always intended to relegate Chrysler to the status of a division, always intended to fire Chrysler's management and always intended to replace them with executives from their headquarters in Stuttgart,'' Kerkorian's complaint said.
Kerkorian seeks over $2 billion in actual damages, $1 billion in damages for the drop in value of the DaimlerChrysler stock since the merger, and punitive damages of at least $6 billion.
Tracinda also said it "seeks to unwind the transaction so that Chrysler will once again be an independent corporation owned by Chrysler shareholders."
Before the merger, Kerkorian was often at odds with Chrysler management over the direction of the company. He made a $23 billion bid in 1995 to buy Chrysler. That bid failed, but in return for peace Kerkorian was given a seat on Chrysler's board.
Auto industry analyst David Healy with Burnham Securities said there were clear signs that the deal was not a merger of equals when it was approved. The majority of shareholders were German, and then-Chrysler Chairman Robert Eaton promised to give up his title as co-chairman within three years.
"Kerkorian was an enthusiastic supporter" of those terms, Healy said. "To me, it was never a merger of equals."
Since the merger, the value of DaimlerChrysler's stock has dropped steadily, reaching an all-time low of $37.90 after Holden's ouster and Zetsche's appointment earlier this month.
The stock was up $1.02 at $41.25 on the New York Stock Exchange, but nearly 55 percent below DaimlerChrysler's post-merger high of $108.62.
