Daimler Raises Provision for European Union Dispute by $739 Million
Daimler AG, the world’s biggest truck maker, will increase provisions for a possible European Union antitrust fine by 600 million euros ($739 million) following a preliminary ruling by the regulator.
The move won’t affect Daimler’s forecast that 2014 earnings before interest and taxes at ongoing business will increase significantly, the Stuttgart, Germany-based manufacturer said in a statement. The provision, to be posted in fourth-quarter figures, is in addition to one taken in 2011 regarding the case, Daimler said.
Daimler was among commercial-vehicle producers that received formal EU antitrust complaints in November about suspected price fixing following raids by investigators in 2011. Daimler said Dec. 18 that the extra provision stems from information that the EU provided in the complaint and that, while the company cooperating with authorities, it’s reviewing options for safeguarding its rights in further proceedings.
Volvo AB, the world’s second-largest maker of heavy vehicles, said on Nov. 25 that it’s taking a 400 million-euro provision after receiving the notice, called a statement of objection, from the European Commission, the EU’s executive arm.
The move will hurt fourth-quarter operating profit, and the provision amount will be assessed regularly, the Gothenburg, Sweden-based company said.
Ute von Vellberg, a Daimler spokeswoman, declined Dec. 18 to comment on the amount of the 2011 provision. The company assumes it has enough reserves to meet any costs from a ruling, she said.
