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Daimler Agrees To Pay More Than $2.2 Bln To Settle U.S. Diesel Vehicle Emission Claims

Daimler AG, the maker of Mercedes-Benz cars, said Thursday that it has agreed to pay more than $2.2 billion to settle U.S. claims over emissions from its diesel vehicles.

The Stuttgart, Germany-based automaker said it reached the agreement in principle with various U.S. Authorities to settle civil and environmental claims regarding emission control systems of about 250,000 diesel passenger cars and vans in the United States.

The company has also reached an agreement with plaintiffs' counsel to settle the consumer class action "In re Mercedes-Benz Emissions Litigation," which is pending before the U.S. District Court for the District of New Jersey.

The settlements are subject to the final approval of the relevant authorities and courts.

As per the terms of settlement, Daimler will pay $1.5 billion to U.S. authorities, as well as pay another $700 million to settle a consumer class lawsuit. In addition, the company estimates further expenses of a mid three-digit-million euros amount to fulfill requirements of the settlements.

The German carmaker expects a corresponding impact on the free cash flow of the industrial business over the next 3 years with the main impact within the next 12 months.

Daimler's management board and supervisory board approved the proposed settlements after weighing all aspects in the best interest of the company.

U.S. regulators stepped up their investigations of diesel emissions after Volkswagen AG's cheating scandal emerged in 2015. The U.S. Justice Department asked Daimler to investigate its vehicle-certification process the following year.

Volkswagen admitted to rigging as many as 11 million diesel engines worldwide, including about 600,000 in the U.S. The emissions violations cost the automaker more than $30 billion.

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