DaimlerChrysler AG (ISIN: DE0007100000) is a German car corporation and the world's fifth largest car manufacturer. As well as automobiles DaimlerChrysler manufactures trucks and provides financial services through its DaimlerChrysler Financial Services arm. The company also owns a major stake in aerospace group EADS.

DaimlerChrysler was formed in 1998 after Daimler-Benz (the manufacturer of Mercedes-Benz) (Baden-Württemberg) merged with Chrysler Corporation (USA). However the merger failed to produce the trans-Atlantic automotive powerhouse that dealmakers had hoped and DaimlerChrysler announced on 14 May 2007 that it would sell Chrysler to Cerberus Capital Management of New York, a private equity firm that specializes in restructuring troubled companies, effectively unwinding the orginal transaction. As a result, DaimlerChrysler will be called Daimler AG, pending shareholder approval.

The company produces cars and trucks under the brands Chrysler, Dodge, Jeep, Mercedes-Benz, Smart, Maybach, and GEM, among others. The Chrysler Group (Chrysler, Jeep and Dodge) also provides its customers with parts and accessories marketed under the Mopar brand name.

Chrysler has suffered a series of setbacks in recent years, culminating in DaimlerChrysler's agreement to sell the unit to Cerberus Capital Management in May 2007 for US$7.4 billion. Through most of its history, Chrysler has been the third largest of the "Big 3" US auto makers, but in Jan 2007, DaimlerChrysler, excluding its luxury Mercedes and Maybach lines, also outsold traditionally second place Ford, though behind Toyota.

Chrysler reported losses of US$1.5 billion in 2006. It then announced plans to lay off 13,000 employees in mid-February 2007, close a major assembly plant and reduce production at other plants in order to restore profitability by 2008.

DaimlerChrysler was reportedly in negotiations with other carmakers and investment groups since early 2007 to sell Chrysler. General Motors was reported to be a suitor while Volkswagen, the Renault-Nissan auto alliance and Hyundai Motor Company had said that they weren't interested in buying the company.

Under terms of the sale, Cerberus Capital Management will take an 80.1 percent stake in the new company, to be known as Chrysler Holding. DaimlerChrysler will change its name to Daimler AG and retain the remaining 19.9% stake in Chrysler.

Of the US$7.4 billion, purchase price, Cerberus Capital Management will invest US$5 billion in Chrysler Holdings and US$1.05 billion in Chrysler’s financial unit. The new Daimler AG will receive US$1.35 billion directly, a remarkable reverse in fortunes on the US$36 billion paid to acquire Chrysler in 1998.

The merger had been viewed as contentious by many investors. The US$36 billion merger became the focal point of several lawsuits, including one filed by billionaire investor Kirk Kerkorian, and also a book (Taken for a Ride: How Daimler-Benz Drove Off With Chrysler, (2000) by Bill Vlasic and Bradley A. Stertz). One class action lawsuit was settled in August 2003 for $300 million. On April 7, 2005, U.S. District Judge Joseph Farnan Jr. presided over a bench trial in Wilmington, Delaware, and ruled in favor of DaimlerChrysler, rejecting Kerkorian's allegations.

As late as 2002, the merged company appeared to run two independent product lines, with few signs of corporate integration. In 2003, the Detroit News alleged the "merger of equals" was, in fact, a takeover. The allegation came forth as new products such as the Chrysler Crossfire (using extensive Mercedes parts) and the Dodge Sprinter/Freightliner Sprinter (a re-badged Mercedes-Benz Sprinter van) came to market.

The merger also claimed the job of its architect, Chairman Jürgen E. Schrempp, who resigned at the end of 2005 in response to the fall of the company's share price following the transaction