Mercedes 2001 Annual Report Download - page 89

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Notes to Consolidated Financial Statements 85
In April 2001, DaimlerChrysler completed the sale
of 60% of the interest in its Automotive Electronics
activities to Continental AG for €398 million, resulting
in a pretax gain of €209 million. The agreement confers
on Continental the option to acquire from the Group,
and DaimlerChrysler the option to sell to Continental,
the Group’s remaining 40% interest in the Automotive
Electronics activities. The DaimlerChrysler option is
exercisable from April 1, 2002 through July 31, 2004.
The Continental option is exercisable from November 1,
2004 through October 31, 2005. The price for the re-
maining 40% interest ranges from €225 million to €235
million, depending upon when the option is exercised
and various other factors. DaimlerChrysler accounts for
the remaining interest in its Automotive Electronics ac-
tivities using the equity method subsequent to the sale.
In October 2000, DaimlerChrysler acquired all the
remaining outstanding shares of Detroit Diesel Corpo-
ration for approximately €500 million. The acquisition
of the remaining 78.6% interest in Detroit Diesel was
accounted for using the purchase method of accounting
and resulted in goodwill of approximately €310 million,
which was being amortized on a straight-line basis us-
ing an useful life of 20 years until December 31, 2001.
After December 31, 2001, goodwill will no longer be
amortized, but instead tested for impairment at least
annually.
In October 2000, DaimlerChrysler and Deutsche
Telekom combined their information technology
activities in a joint venture. As part of the agreement,
Deutsche Telekom received a 50.1% interest in
T-Systems ITS (formerly debis Systemhaus) through
a capital investment in T-Systems ITS (see Note 11 and
Note 34).
In September 2000, DaimlerChrysler purchased
a 9% equity interest in Hyundai Motor Company for
approximately €450 million. DaimlerChrysler holds
a 10% ownership interest at December 31, 2001 and
is accounting for its investment in Hyundai as an
available-for-sale security.
In September 2000, DaimlerChrysler acquired
100% of the outstanding shares of the Canadian com-
pany Western Star Trucks Holdings Ltd. for approxi-
mately €500 million. The acquisition was accounted for
using the purchase method of accounting and resulted
in goodwill of approximately €380 million, which was
being amortized on a straight-line basis using an useful
life of 20 years until December 31, 2001. After Decem-
ber 31, 2001, goodwill will no longer be amortized, but
instead tested for impairment at least annually.
Information on the exchange of the Group’s con-
trolling interest in DaimlerChrysler Aerospace for
shares of EADS and the related initial public offering of
EADS in July 2000 is included in Note 11.
Due to an initial public offering in March 1999 as
well as to the selling of a substantial portion of its re-
maining interests in September 1999, DaimlerChrysler
Services AG, a wholly-owned subsidiary of
DaimlerChrysler, reduced its remaining interest in
debitel AG to 10% (see Note 11). In January 2001, the
Group sold its remaining 10% interest in debitel AG to
Swisscom for net proceeds of €305 million. The trans-
action resulted in a pretax gain of €292 million which
is included in financial income (expense), net.
In the first quarter of 1999, DaimlerChrysler
acquired the remaining outstanding shares of Adtranz
from Asea Brown Boveri for €441 million.