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package sector of the air cargo market between 1987 and 2000,
depending on the geographical market.
During June 1989, Nicholas Miller (Miller) of Coopers, who
was assisting JAL and Nissho Iwai, prepared a rough estimate to
illustrate a conceivable value for the DHL trademark outside the
United States. Miller arrived at a $25 million estimate, which
was provided to the foreign investors, who considered the
information in their evaluation of the transaction. In reaching
that estimate, Miller believed that the value of DHL’s trademark
rights was diluted by the agreements between DHLI and DHL and
DHLI’s rights and use. Miller’s $25 million estimate was based
on the assumptions of $250 million of capital invested and pre-
tax operating profits of $80 million. He then used a 30-percent
return on capital, or $75 million, leaving a premium of $5
million, which he extended for 5 years to reach a $25 million
estimate. The foreign investors viewed DHLI as having the right
to use the DHL trademark during the current term of the mutual
agency agreement without additional cost.
In July 1989, Schwartz questioned the impact of the DHL
trademark value on DHL’s tax position. DHL shareholders had
proposed a $100 million value for the trademark. JAL and Nissho
Iwai decided that they would offer $50 million to DHL for the
dual purpose of purchasing DHL’s trademark rights and infusing
capital into DHL. In their decision to make this offer, JAL and
Nissho Iwai considered DHL’s need for capital and had considered
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