Daimler Paying $3B To Settle US Diesel Emissions From Mercedes Models

Daimler Reaches Tentative Agreements to Settle U.S. Regulatory and Civil Procedures Regarding Diesel Emissions
Stuttgart (Germany), August 13, 2020
Daimler AG and its subsidiary Mercedes-Benz USA LLC (MBUSA) have reached an agreement in principle with various US authorities to settle civil and environmental claims regarding emission control systems of approx. 250,000 diesel cars and vans in the United States. The US authorities involved are the Environmental Protection Agency (EPA), the California Air Resources Board (CARB), the Environment and Natural Resources Division of the United States Department of Justice (DOJ), the prosecutor’s office General of California and US Customs and Borders. Protection.

The company has fully cooperated with the US authorities and continues to do so.

Daimler AG and MBUSA have also reached a tentative agreement with plaintiff attorneys to settle the “In re Mercedes-Benz Emissions Litigation” consumer class action lawsuit, which is pending in US District Court for the District of New Jersey.

The Company has made sufficient provisions to cover the expected total costs of the settlements.

For settlements with US authorities, Daimler expects costs of approx. 1.5 billion USD (approximately 1.27 billion EUR). The estimated cost of settling the class action is approx. $ 700 million (approximately € 592 million), including the court-scheduled award of legal fees and costs. In addition, Daimler estimates the additional expenditure to be an average of three million euros in triple digits to meet the requirements of the regulations.

Daimler expects a corresponding impact on the free cash flow from industrial activity over the next 3 years with a primary impact over the next 12 months.

Today, the board of directors as well as the supervisory board of Daimler AG and Mercedes-Benz AG approved the proposed regulations after weighing all aspects in the best interests of the company. With the proposed regulations, the company is taking an important step towards legal certainty regarding various diesel proceedings in the United States.

The regulations are subject to final approval by the competent authorities and courts. The tentative agreement with US government authorities will be commemorated in binding consent decrees. In the coming weeks, authorities will then file the consent decrees with a U.S. district court for final approval. Settlement of the US consumer class action lawsuit will be subject to the approval of the US District Court for the District of New Jersey.

Daimler has informed the capital markets of the tentative agreements to comply with the disclosure requirements of the European Market Abuse Regulation (MAR).

EUR / USD exchange rate as of August 13, 2020, 1 EUR = 1.183 USD.

Related Posts