Business & Finance
A lawsuit challenging the 1998 merger that created DaimlerChrysler AG, the world's No. 3 automaker, is due to be heard beginning Monday in federal court in Wilmington, Del. Kirk Kerkorian, formerly Chrysler's biggest shareholder, is seeking as much as $2 billion in compensatory damages from the combined company, The New York Times reported. He contends that what officials promoted as a "merger of equals," was, in effect, a takeover by Germany's Daimler-Benz. DaimlerChrysler officials maintain Kerkorian both understood and supported the deal, the newspaper reported.
The $3 billion merger of oil-industry giant Yukos and its smaller rival, Sibneft, was suspended without warning Friday, and reports said the latter was seeking a way out of the deal. The merger, announced last April, was the biggest in Russian corporate history and created the industry's fourth-largest producer after ExxonMobil of the US, Britain's BP, and Royal Dutch/Shell. Some analysts suggested that Sibneft wished to avoid becoming entangled in the legal troubles stemming from the Oct. 25 arrest - and subsequent replacement - of Yukos founder/ chairman Mikhail Khodorkovsky on charges of fraud and tax evasion. Khodorkovsky is in jail, awaiting trial. But other analysts said it appeared to them that Sibneft was seeking to take advantage of its beleaguered partner's problems to sweeten their deal or perhaps to search for a foreign buyer that might offer more generous terms. A Yukos executive said the announcement came as a surprise and that his company still was working to finalize the merger. Russian Prime Minister Mikhail Kasyanov denied that the Kremlin had influenced the suspension and said "there is no possibility" his government would nationalize Yukos.
A $9.2 billion bailout - and the temporary nationalization - of Japan's bankrupt Ashikaga Financial Group was announced late Saturday by the Tokyo government. The company operates a regional bank that is not among the nation's largest. It had been warned earlier this year to improve its earnings, but its debt at the end of September exceeded assets by $934 million, reports said. Ashikaga's management is expected to be replaced, the Tokyo newspaper Yomiuri reported.