Updated from 1:19 p.m. EDT

DaimlerChrysler

(DCX)

said Friday that it avoided a jury trial by paying $300 million to settle a lawsuit brought by a group of shareholders who accused the carmaker of wrongdoing in the merger that created the company.

The plaintiffs, mostly institutional investors led by Florida's public pension fund, the State Board of Administration (SBA), accused the company of defrauding them in the 1998 merger of Daimler-Benz and Chrysler by claiming that the deal would create a "merger of equals."

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In a press release, the company said it believes the suit is completely without merit, but it agreed to a settlement, since a local jury could have reached a different conclusion.

"The SBA Trustees are very pleased with the settlement, which will help protect the assets of current and future Florida retirees," executive director of the SBA Coleman Stipanovich said in a statement.

One major shareholder, billionaire investor Kirk Kerkorian who held a 14% stake in Chrysler at the time of the merger, wasn't included. He sued the company for $2 billion, and a trial is scheduled to begin Dec. 1.

"We sued first," said Kerkorian's lawyer, Terry Christensen. "The people in this class-action suit followed our allegations with their own. Ours is an individual case. We were not part of the class action."

Shares of DaimlerChrysler were recently down 36 cents, or 1%, to $37.64.