Mercedes 2010 Annual Report Download - page 192

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3. Significant acquisitions and dispositions of interests
in companies and of other assets and liabilities
Acquisitions
Renault-Nissan. In April 2010, within the framework of a wide-
ranging strategic cooperation with the Renault-Nissan Alliance,
the Group entered into a cross-shareholding structure. In
this regard, Daimler received a 3.1% equity interest in Renault
SA (Renault) as well as 3.1% of the shares of Nissan Motor
Company Ltd. (Nissan) from Renault in an equivalent total amount
of €1.3 billion. Daimler used treasury shares for the acquisi -
tions and additionally paid €90 million in cash. See Note 20 for
infor mation on the number of treasury shares used.
Dispositions
Daimler Financial Services. Most of the non-automotive assets
subject to finance leases that were presented separately as
held for sale in the consolidated statement of financial position
at December 31, 2009 (€310 million) were sold in 2010. These
transactions resulted in a cash inflow of €274 million and a pre-
tax expense of €1 million in 2010. In the third quarter of 2010,
the Group reclassified the remaining non-automotive assets
presented as held for sale to receivables from financial services,
as the criteria for a held for sale classification were no longer
met. In 2010, the measurement of these assets resulted in a pre-
tax gain of €1 million. In 2009, the measurement of the assets
classified as held for sale at fair value resulted in a pre-tax
expense of €69 million.
Moreover, in 2010, the Group sold additional non-automotive
assets subject to finance leases which were previously shown
under receivables from financial services. These transactions
resulted in a cash inflow of €187 million and a pre-tax expense
of together €9 million in 2010 (including a pre-tax expense of
€35 million from the measurement of these assets).
Also in 2009, Daimler Financial Services achieved a cash-inflow
of €825 million from the sale of non-automotive finance leases.
These sales resulted in a pre-tax expense of €31 million.
The results of the above-mentioned transactions are included
in “cost of sales” in the consolidated statement of income/
loss. The expense is allocated to the Daimler Financial Services
segment.
Tata Motors. In March 2010, the Group sold its equity interest
of approximately 5% in Tata Motors Limited to various groups
of investors through the capital market. This transaction resulted
in a cash inflow of €303 million and a gain before income taxes
of €265 million in 2010. The gain is included in “other financial
income/expense, net” in the consolidated statement of income/
loss and in the reconciliation from total segments’ EBIT to Group
EBIT within the segment reporting.
Chrysler. Based on a binding term sheet signed in April 2009,
Daimler and Cerberus entered into a redemption agreement
in June 2009. In connection with this agreement, Daimler gave
up its 19.9% equity interest in Chrysler Holding LLC (Chrysler
Holding). As a result, since June 3, 2009, Daimler no longer has
any equity interest in Chrysler Holding or its subsidiaries and
all Daimler representatives resigned from the boards of Chrysler
Holding and its subsidiaries.
The binding term sheet also provided for a settlement agree-
ment covering issues relating to Chrysler which Daimler, the
US Pension Benefit Guaranty Corporation (PBGC), Chrysler
LLC (Chrysler) and Cerberus entered into in June 2009. Among
other matters, Chrysler and Cerberus waived all claims that
might arise from the representations and warranties made in
the contribution agreement dated August 3, 2007, including
claims by Cerberus that Daimler allegedly improperly managed
certain issues in the period between the signing of the contri-
bution agreement and the conclusion of the transaction, as well
as certain other claims against Daimler.
In connection with this settlement agreement, Daimler paid
US$200 million into Chrysler’s pension plans in each of June
2009 and June 2010. The remaining amount of US$200 million
is due in the second quarter of 2011. The 2007 Daimler pension
guarantee of US$1 billion vis-à-vis the PBGC has been replaced
by a new guarantee in an amount of US$200 million that will
remain in place until August 2012.