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Daimler-Benz Acquires Stake in AMG

26 June 1998

Daimler-Benz Acquires Stake in AMG

                       -- Gradual equity participation
               -- Take-over to be completed by January 1, 2009
       -- Motor Sport department to be spun-off as AMG Motorsport GmbH

    STUTTGART, Germany, June 26 -- Daimler-Benz AG has decided to
take over AMG GmbH, Affalterbach, gradually over a period of time.  The new
company is to be known as "Mercedes-AMG GmbH" and will have its seat in
Affalterbach.  On January 1, 1999 AMG will transfer 51 percent of its business
shares to Daimler-Benz.  In the second phase, which will be completed by
December 31, 2001, Daimler-Benz will take over a further 24.1 percent.  The
remaining shares will be transferred by the current owner of AMG, Hans Werner
Aufrecht by January 1, 2009.  Both companies have agreed not to reveal the
agreed purchase price.
    "We are convinced that the high-performance sports car segment will
continue to be lucrative in the future," explained Prof. Jurgen Hubbert,
member of the Daimler-Benz Board of Management for the Passenger Cars
division.  "To date, unlike some of its competitors, the Mercedes-Benz brand
has not been represented with its own product in this attractive segment of
the passenger car market.  The purchase of AMG now gives us the chance to
expand the existing brand's position on the market in a sensible manner."
    Mercedes-AMG will continue to be responsible for development, production,
purchasing, marketing and other administrative tasks in the future and will be
managed by Dr. Wolfgang Bernhard and Domingos Piedade.  Prof. Hubbart
explains: "The key to the success of Mercedes-AMG will be its independence and
its flexibility coupled with the know-how of the Passenger Cars division at
Daimler-Benz.  We will be able to achieve this with this new company
structure."
    The Daimler-Benz AG and AMG GmbH, which was founded in 1967 by Hans Werner
Aufrecht (A) and Erhard Melcher (M) in GroBaspach (G), have enjoyed close
relations for many years now.  The two companies concluded a cooperation
agreement in mid 1990 which goes far beyond the pure sporting interests of
both companies.  Amongst other things, this contract resulted in the C 36 AMG
which was developed jointly by both companies in 1993.  Last year Daimler-Benz
sold approximately 2,800 AMG-Mercedes cars (based an C- and E-class models).
In addition, AMG optically revalorized approximately 10,000 Mercedes-Benz
passenger cars from several different ranges and fitted some 26,000 vehicles
with AMG sets of wheels in 1997.  Approximately 500 people are employed in the
Affalterbach plant, approximately 100 of which work in the motor sports
department.  Last year AMG recorded a total turnover of just under DM 290
million.
    In addition to the new Mercedes-AMG GmbH, a framework agreement covering
the foundation of AMG Motorsport GmbH has also been reached.  This agreement
covers AMG and Mercedes-Benz' motor sports activities for the next five years.