DaimlerChrysler rules out VW link

DaimlerChrysler wants co-operation instead of a merger

Carmaker DaimlerChrysler has ruled out taking a stake in rival Volkswagen.

Its comments came days after Daimler admitted that the two German firms had previously discussed a possible merger.

Yet the head of Daimler's luxury Mercedes unit, Dieter Zetsche, said the two companies would continue to hold talks about future co-operation.

This could include jointly developed new vehicles or future shared engines. Fellow German carmaker Porsche is planning to increase its stake in VW.

Porsche said a week ago that it wished to boost its stake in VW from the current 5% to 20% to help prevent any hostile takeovers that could threaten their business links.

DaimlerChrysler and VW shares both rose in Monday trading in Frankfurt.