DaimlerChrysler and Bombardier Terminate Dispute over Adtranz Sale

STUTTGART, Germany, and NEW YORK, Sept. 28 -- Today, the Board of Management of DaimlerChrysler AG has approved a settlement negotiated with Bombardier Inc. and its subsidiary Bombardier Transportation (Holdings) Germany GmbH (together "Bombardier") resolving all disputes in connection with the sale of DaimlerChrysler Rail Systems GmbH (Adtranz) to Bombardier in 2001.

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DaimlerChrysler sold Adtranz to Bombardier on April 30, 2001 for a preliminary purchase price of USD 725 million. Due to the arbitration proceedings pending thus far, DaimlerChrysler has not realized euro 300 million of the purchase price, which had been fully paid. Instead, euro 300 million was accounted for as deferred gain.

The settlement provides for a purchase price adjustment in favor of Bombardier in the amount of euro 170 million. On the basis of the settlement, a realization of the deferred gain in the amount of euro 130 million is possible. All other claims of Bombardier are withdrawn. The claims raised by Bombardier in arbitration proceedings filed with the International Chamber of Commerce in Paris in July 2002 amounted to approx. euro 960 million.

The settlement becomes effective on Wednesday, September 29, 2004 (18.00 hours CEST). Thereafter, the arbitration proceedings will be terminated.

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