Daimler shares jump after Abu Dhabi takes majority stake

March 23rd, 2009 - 5:30 pm ICT by IANS  

Stuttgart (Germany), March 23 (DPA) Shares in giant German carmaker Daimler AG jumped more than 6 percent Monday after the manufacturer of luxury Mercedes Benz autos sold a 9.1 percent stake to Aabar Investments, a fund owned by the Arab emirate of Abu Dhabi.
As a result of the acquisition, Abu Dhabi, which is to pay 1.95 billion euros ($2.6 billion) for 96.4 million newly-issued shares, will replace Kuwait as Daimler’s largest stakeholder. Kuwait still holds a 6.9 percent Daimler stake.

The move by Aabar Investments was seen by investors as an expression of confidence in Daimler, which has been hit by the global car crisis, with falling sales forcing it to cut production.

Daimler expects to record an operating loss for the first quarter after profits slumped by nearly two-thirds last year to 1.4 billion euros.

By late morning, Daimler shares had climbed 6.2 percent to 22.64 euros. The state-controlled Aabar is paying 20.27 euros per Daimler share for its holding in the company.

“We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy,” said Daimler chief Dieter Zetsche while announcing Aabar’s acquisition.

“We look forward to working together to pursue joint strategic initiatives,” he said.

“Daimler is an iconic brand and a financially strong company with a reputation for excellence worldwide. We are delighted to having received the opportunity to be making this investment,” said Aabar chairman Khadem Al Qubaisi.

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