Daimler reaches deal on final split from Chrysler

Under the deal, Daimler AG will forgive the loans it extended to Chrysler when it sold most of the company to Cerberus Capital Management LP in 2007.

Daimler also agreed to pay $200 million into Auburn Hills, Mich.-based Chrysler's pension plan when the deal takes effect and in each of the two years afterward.

The agreement is expected to reduce Daimler's second-quarter earnings before interest and tax by about $700 million.

Daimler had previously written down the value of its Chrysler stake to zero.