DaimlerChrysler Denies Plotting Chrysler Buy In 1995

FRANKFURT January 27, 2003; Dow Jones reported that DaimlerChrysler AG Monday denied a report saying Daimler-Benz AG plotted as early as 1995 to take over Chrysler Corp.

"Our merger discussions with Chrysler began in January 1998," the Germany- based auto giant said in a prepared statement, responding to an article in Detroit News.

According to the daily newspaper, lawyers for billionaire Kirk Kerkorian and other disgruntled Chrysler shareholders uncovered a secret document on a potential acquisition, dubbed "Project Blitz."

The paper is meant to prove Daimler officials had long eyed a takeover of Chrysler, even as they touted a "merger of equals" in 1998.

Daimler-Benz at the time asked investment bank Goldman Sachs Group Inc. to explore a potential buyout, the paper said. The project, which advocated an acquisition, dissected Chrysler's finances and products and outlined potential obstacles to a buyout.

A class-action suit seeking $13 billion in damages against DaimlerChrysler and some executives alleges the deal robbed shareholders of a takeover premium.

However, DaimlerChrysler said: "There was never a project at Daimler-Benz to 'take over' Chrysler in 1995 or 1996 or 1997 - by any name."

When asked whether there were considerations about a potential acquisition that were less formal than "Project Blitz," however, a DaimlerChrysler spokesman at its headquarters in Stuttgart declined to comment.

The car maker said the story of Project Blitz comes from a consultant, Ralph Bachenheimer, who earlier had claimed - in a lawsuit that was ultimately dismissed - that the 1998 merger between the U.S. and German car makers was his idea.

A spokesperson for Goldman Sachs wasn't immediately available for comment.