Chrysler Meets Its Merger

FORTUNE 500 Profiles and Current Quotes Chrysler Daimler-Benz

Deutschland Über Detroit? In what is set to become the largest industrial merger in history, German luxury automaker Daimler-Benz announced Thursday it will effectively absorb America's No. 3 car firm, Chrysler. Daimler describes the deal as a "merger of equals," but there's no doubt about who the senior partner is here. Chrysler shareholders will receive just over half a share in the new company for every one share their Daimler counterparts get, and Chrysler chair Robert Eaton will lose his co-leadership position inside of three years.

While the speed of the deal took analysts by surprise, the disparity didn't. Daimler, after all, is an automotive colossus, the second largest carmaker in Europe. "German auto pros will tell you directly -- Daimler is buying Chrysler," reports TIME's Bonn Bureau Chief Jordan Bonfante. "Germany is buying the U.S., and they've got deep pockets."

Whatever the impact on American pride, the deal is a bonanza for shareholders -- especially Kirk Kerkorian, the reclusive 81-year-old who owns 13.8 percent of Chrysler. Back in 1990, he was derided for his interest in the once-struggling Michigan firm's stock. Now, if shareholders and governments on both sides of the Atlantic agree to the merger, he will reap a satisfying $5 billion payoff -- more than triple his original investment. Who says you shouldn't throw money at Motown?