Chrysler Deal Fuels Daimler Stock Buyback

STUTTGART, Germany

DaimlerChrysler, soon to become Daimler AG, said it plans to spend more than $10 billion over the next year to buy back nearly 10 percent of its outstanding shares.

The stock-buyback plan was revealed as DCX released second-quarter results, including the news that, in its final quarter under German ownership, Chrysler lost an undisclosed amount of money before being acquired by Cerberus Capital Management, the U.S. private-equity fund headed by former U.S. Treasury Secretary John Snow.

The stock buyback, if completed, would reduce the number of outstanding shares, while increasing the value of the remaining shares.

DCX said pretax earnings in the second quarter slipped 10 percent, to $2.9 billion, while revenue declined 3 percent, to $32.5 billion. With Chrysler now in private hands, Daimler now is forecasting full-year pretax earnings of nearly $12 billion.