Submitted by dmcarolina on November 8, 2007

• Category: Business
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Merger Acquisition Finance Paper

Daimler-Chrysler merger created the world's fifth biggest car maker. The company is currently the third largest auto manufacturer. Thus we can clearly see that both firms benefited from the economies of scale advantage. Daimler could be able to make and sell more Mercedes more cheaply because it has acquired Chrysler, and vice versa. The $13 billion premium was another important advantage. The auto industry was facing severe problems with excess capacity during this period. So reducing the number of players in the global marketplace also decreased the chance of dramatic overbuilding. There was a synergy too. Companies had different but complementary product lines and there were no...

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