DaimlerChrysler told to pay out over merger share value

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DaimlerChrysler told to pay out over merger share value

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A German court has ordered car maker DaimlerChrysler to pay money to some former shareholders of Daimler-Benz.

The case centred on its 1998 merger with US firm Chrysler.

Nearly 2% of investors complained that they had been forced to exchange their stock at that time for less than it was worth.

The merger, engineered by former Chief Executive Juergen Schrempp, was criticised by some investors.

The value of their shares is now almost half what it was when they were first issued after the merger.

The Stuttgart state court decided DaimlerChrysler must pay the 17 people who sued just over 22 euros per share to settle the dispute. DaimlerChrysler says it will appeal to a higher court.

Three years ago the company agreed to pay 230 million euros to settle a lawsuit filed by Chrysler investors who claimed they were misled.

Billionaire US investor Kirk Kerkorian is also suing over how the merger was handled.

He was Chrysler’s largest investor at the time of the link-up. He was claiming up to 2.3 billion euros. One law suit was dismissed but he is appealing.

DaimlerChrysler’s shares fell in value when the German court ruling was announced.