This case study on Daimler’s history on the NYSE aims to illustrate how global equity markets have evolved in the past two decades and what the reasons are for companies to raise capital in these global markets. In doing so, the case study proceeds as follows: After a brief introduction in Part I, Part II describes the initial listing of Daimler ADRs on the NYSE in October 1993 and its consequences for Daimler’s financial reporting, followed by the reasons that motivated Daimler to come to New York. Part III provides an overview of the legislative and regulatory changes that took place both in Germany and the U.S., and how these developments affected Daimler’s decision to terminate its listing on the NYSE in 2010. Part IV investigates how investors today are able to invest in foreign issuers such as Daimler. Finally, the case study concludes by summarizing the reasons for Daimler’s delisting and its meaning for the competitiveness of the U.S. public markets in Part V.
TABLE OF CONTENTS
I. INTRODUCTION
II LISTING ON THE NYSE AND ITS CONSEQUENCES
A. DAIMLER’S ADR LISTING
B. CONSEQUENCES FOR DAIMLER
C. DAIMLER’S REASONS FOR LISTING
1. LIQUIDITY
2. PRESTIGE
3. BONDING
4. DAIMLER’S NEED FOR RESTRUCTURING
III. LEGISLATIVE CHANGES IN GERMANY AND THE U.S
A REFORM OF THE GERMAN FINANCIAL MARKETS
1. THE SECURITIES TRADING ACT (1994)
2. THE TAKEOVER ACT (2002)
B. IAS/IFRS
C. SARBANES-OXLEY AND ITS GERMAN COUNTERPARTS
1. SOX’S CORE PROVISIONS
2. INCONSISTENCIES/CONFLICTS WITH GERMAN LAW
3. DUAL COMPLIANCE COST
IV. TRADING IN DAIMLER SHARES TODAY
A DELISTING REQUIREMENTS
B. CHANGED INVESTOR BEHAVIOR
C. ADR PROGRAM
V. CONCLUSION
APPENDIX A. HISTORY OF GERMAN COMPANIES ON THE NYSE
APPENDIX B. DELISTINGS BY FOREIGN COMPANIES IN NUMBERS
APPENDIX C. DOMESTIC AND FOREIGN DELISTING RATES
APPENDIX D. CROSS-HOLDINGS IN GERMAN PUBLIC COMPANIES IN 1996 AND 2002
APPENDIX E. FOREIGN OWNERSHIP OF DAX 30 COMPANIES (AS OF 2005)
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