The first ordinary shareholders` meeting of Daimler is scheduled for Wednesday, April 9, 2008 in Berlin, Germany.

3. The Transaction with Cerberus

Why did you choose Cerberus and not another offer?

We had defined a number of areas where we would be focusing on, striving for the best results possible and making a final evaluation on.

This was in the first place the best starting point for Chrysler to go into a successful future.

It was secondly, a transaction which would relieve Daimler from all risks associated with this business, including health care and all other elements, risk elements, liability elements, associated with the Chrysler business.

Third, it was the certainty of the transaction, so we did not want to be stuck halfway but have certain ending of that transaction.

And fourth, it was speed. We wanted to make absolutely sure that this unfortunate time of uncertainty within Chrysler, for the Chrysler employees and the Chrysler business partners, would be as short as reasonably possible. I think three months is a relatively good answer to that.

And fifth, it was the best possible value of the transaction.

Fortunately, in all five categories, Cerberus gave us the best offer, which made it relatively easy for us to come to this decision.

Structure of the transaction

CG Investor LLC, a subsidiary of Cerberus Capital Management, has made a capital contribution of €5.2 billion (US $7.2 billion) in return for an 80.1% equity interest in Chrysler Holding LLC. Daimler holds a 19.9% equity interest in this new company. Chrysler Holding LLC holds 100% of both Chrysler LLC, which produces and sells Chrysler, Jeep® and Dodge vehicles, and Chrysler Financial Services LLC, which provides financial services for these vehicles in the NAFTA region.

DaimlerChrysler transferred the industrial business of the Chrysler Group to Cerberus completely free of debt at the time when the transaction was completed.

The Chrysler Group’s financial obligations towards its employees and the employees of Chrysler Financial Services for pensions and healthcare benefits are retained by the Chrysler companies. Daimler has provided a guarantee of US $1 billion to be paid in the event that the Chrysler Group’s pension plans terminate within the next five years. The pension plans are significantly over-funded at present.

Effects on key figures

The transaction will have the following effects on Daimler:

Daimler anticipates a charge against earnings of €2.5 billion in full-year 2007 as a consequence of transferring a majority interest in the Chrysler activities and the closing of the transaction on August 3, 2007. This charge is lower than the estimate of €3-4 billion disclosed in May. It results from the positive result of the discontinued operations in the second quarter as well as a charge against earnings in the magnitude of €3 billion in the third quarter of 2007. The charge in the third quarter results primarily from the valuation of deferred tax assets which are recognized at DaimlerChrysler. It will be necessary to assess the recoverability of these deferred tax assets is affected due to the Chrysler-transaction.

In June, DaimlerChrysler redeemed three long-term bonds ahead of schedule in accordance with the contractual conditions and announced a redemption offer for an additional bond. This resulted in a prepayment penalty of approximately €0.4 billion. There are no changes to the other bonds issued and guaranteed by DaimlerChrysler AG.

In the financial services business of the Chrysler, Jeep® and Dodge brands, Cerberus took over the financing from DaimlerChrysler AG when the transaction was closed; this led to a cash inflow of €25.6 billion.

In light of highly volatile US loan markets, DaimlerChrysler and Cerberus have agreed to support the financing of the majority takeover of Chrysler by Cerberus. Both companies subscribed $2 billion of second lien loan for Chrysler’s automotive business, to be drawn within 12 months. Daimler’s portion will be $1.5 billion. The debt will be priced at market conditions. The maturity of this loan is 7 years. As of August 3, 2008, Daimler`has the right to sell this loan in the credit market.

Schedule for the next steps?

An extraordinary shareholders` meeting took place in Berlin, Germany on October 04, 2007 to decide upon the change of the company’s name. Now, the company operates under its new name Daimler AG.

Company name "Daimler"

The proposal by the Management to change the name of the corporation takes consideration of requirements concerning the legal aspects of brand names as well as strategic factors. The name Daimler has a high profile and evokes a high degree of confidence in the expertise of the corporation as a globally respected manufacturer of automobiles and commercial vehicles.

With Daimler, we will also avoid overlaps between the brand of the corporation and the most valuable automobile brand name in the world, Mercedes-Benz. The name Daimler is significantly more open with regard to the positioning of the brand portfolio than “Mercedes-Benz” or “Daimler-Benz” for example, and therefore is suitable to serve as a corporate name for all our products – not only for Mercedes-Benz but also for Freightliner, Setra, smart etc. With the proposed name of Daimler, the corporation is continuing its tradition while simultaneously signaling a new start. The contributions of Bertha and Karl Benz continue to be honored through the unchanged brand name “Mercedes-Benz”. Mercedes-Benz will continue to be visible where customers want to purchase our products, i.e. all foreign subsidiaries that sell almost exclusively Mercedes-Benz products will be renamed as Mercedes-Benz companies. And all plants that manufacture Mercedes-Benz products will be renamed as Mercedes-Benz plants.