07-20-2000, 06:10 PM
DaimlerChrysler's Freightliner LLC Offers to Acquire 100 Percent Of Western<br>Star Trucks Holdings' Outstanding Stock<p> PORTLAND, Ore., July 19 -- DaimlerChrysler AG (NYSE: DCX) and<br>Western Star Trucks Holdings (Amex: WSH) announced today that their respective<br>boards approved a definitive agreement for DaimlerChrysler's subsidiary<br>Freightliner LLC, the leading heavy-truck manufacturer in North America, to<br>acquire 100 percent of the outstanding stock of Western Star Trucks Holdings,<br>a Canadian-based manufacturer of premium trucks and buses. In an agreement<br>reached with Western Star, Freightliner will offer to purchase the outstanding<br>shares at C$42 per share, for an approximate purchase price of C$670 million.<br> (Photo: http://www.newscom.com/cgi-bin/prnh/20000719/DEW021 )<br> The move further strengthens DaimlerChrysler's position in the commercial<br>vehicle industry by broadening the company's truck product lines and dealer<br>organization, and completing the company's commercial bus product line in the<br>NAFTA region.<br> "The combination of Freightliner, Sterling and Western Star creates a<br>powerhouse commercial vehicle company in North America and a tremendous<br>platform for growth," Dr. Dieter Zetsche, head of DaimlerChrysler Commercial<br>Vehicles Division, said. "The proposed acquisition continues<br>DaimlerChrysler's strategy for growing its worldwide leadership in the heavy-<br>duty truck industry, complements our Freightliner and Sterling lines of<br>trucks, and makes DaimlerChrysler's line of bus product offerings, including<br>Thomas Built Buses and Setra, the broadest and most complete in North<br>America."<br> The proposed acquisition of Western Star complements Freightliner's<br>extensive array of truck products by adding a Class 8 truck line with an<br>established owner-operator customer base and product models with proven<br>vocational capabilities. Western Star's premium, heavy-duty trucks are ideal<br>for logging, mining, oil field services, and other severe-service, high gross-<br>weight applications. In addition, its custom-built, over-the-highway trucks<br>have been highly regarded by the independent owner-operator sector.<br> "The acquisition of Western Star is a perfect continuation and completion<br>of a series of initiatives to further serve North American commercial vehicle<br>customers," Zetsche said. "The combined forces of Western Star and<br>Freightliner are a significant step in our goal to expand our vocational truck<br>and bus product offerings for North America."<br> "Western Star has a reputation and tradition as a highly customized,<br>extremely rugged and stylish premium truck. We look forward to continuing the<br>great traditions of the Western Star brand," Freightliner President Jim Hebe<br>said. The Western Star brand name and truck line will continue in the market,<br>while Western Star's support operations will be integrated with Freightliner's<br>vocational truck division Sterling Trucks. The two product lines fulfill<br>Freightliner's strategy to offer a full truck line to owner-operators as well<br>as expand the company's vocational truck offerings.<br> According to Terry Peabody, chairman of Western Star Trucks Holdings, "We<br>see this as a tremendous opportunity for our employees and customers to be<br>associated with a company as innovative and customer-focused as Freightliner."<br> Through the purchase, Freightliner gains Orion Bus Industries, one of<br>North America's leading heavy-duty transit bus manufacturers. With the<br>addition of Orion to Freightliner's current bus products, DaimlerChrysler<br>becomes North America's sole complete bus product line manufacturer.<br> Orion's bus line will join Freightliner's family of bus products,<br>including Thomas' successful school bus products, the new Thomas SLF 200 --<br>the result of a joint venture between Freightliner and U.K.-based Mayflower<br>Corporation, a new cutaway shuttle bus line acquired from Metrotrans, and the<br>successful Setra coach, a DaimlerChrysler product line. Orion will operate as<br>part of Freightliner's Specialized Vehicles unit.<br> "In only two years since our acquisition of Thomas Built Buses, we will<br>have developed the most complete bus line in North America, fulfilling our<br>strategic objective. Each of our bus brands is the recognized leader in the<br>segment," said Hebe.<br> In addition to expanding Freightliner's bus strategy, the proposed<br>acquisition strengthens Freightliner's Sterling distribution network.<br>Sterling and Western Star will be offered across a selective and optimally<br>combined dealer network throughout North America. Western Star and Sterling's<br>extensive network of dealers in the United States and Canada will expand the<br>distribution and service capabilities of both Western Star and Sterling<br>products.<br> In addition, Freightliner will benefit from cost savings based on<br>synergies and economies of scale achieved through increased purchasing volume,<br>manufacturing efficiencies and administrative savings.<br> "The Sterling product line has been tremendously successful, surpassing<br>our expectations and forecasts," Hebe added. "Now, we will be able to<br>continue this rapid rate of growth with increased production and distribution<br>capacity through the Western Star acquisition."<br> As part of the proposed acquisition, Freightliner gains a new 460,000-<br>square-foot truck manufacturing plant opened in March in North Charleston,<br>S.C., with the capacity to produce up to 20,000 units per year. The proposed<br>acquisition also includes Western Star's headquarters and truck plant in<br>Kelowna, BC, and bus manufacturing sites in Mississauga, Ontario and Oriskany,<br>NY. Western Star sold nearly 7,200 trucks and 800 buses in 1999, with<br>revenues of C$1.3 billion.<br> In addition to Freightliner acquiring Western Star Trucks Holdings,<br>Western Star Australia Pty Ltd, a wholly-owned subsidiary of Western Star<br>Trucks, will be sold to a corporation associated with Western Star's current<br>chairman Terry Peabody, for approximately C$39 million. Also included in the<br>purchase will be the distribution rights in Australia, New Zealand and the<br>Asia-Pacific region. MAN-Australia, acquired by Western Star Australia in<br>March, will operate under the direction of the new Australian corporation.<br> Under the terms of the agreement, Western Star Trucks Holdings will<br>convene a meeting of their Shareholders on a date to be announced to vote upon<br>the proposed Plan of Arrangement. The proposed acquisition remains subject to<br>approval by the governmental authorities of Canada, the U.S., and Australia.<br>The transaction should be completed in the Fall of 2000.<br> Sterling Truck Corporation, based in Willoughby, Ohio, was formed by<br>Freightliner following Freightliner's 1997 purchase of Ford Motor Company's<br>heavy truck business. Since production began in mid-1998, Sterling has gained<br>more than six percent of U.S. heavy-duty truck sales and, with a newly-<br>introduced medium-duty product, is rapidly growing its presence in the Class<br>5-7 segment. Sterling's large customer base focuses on vocational<br>applications such as construction, refuse collection, urban services, and in<br>regional highway haulage.