will acquire 34% of

Mitsubishi Motors

in an effort to harness a faster growth engine for Daimler's stalled short-term earnings.

TheStreet Recommends

The companies announced Monday that they would form an alliance to design, develop, produce and distribute cars, but heavy and commercial trucks manufacturing will remain separate, according to a statement from the companies.

Under the agreement, the German-American auto maker will acquire more than a third of the Japanese company, a stake worth 2.1 billion euros or $2.16 billion.

The union of the companies, widely expected, will help DaimlerChrysler increase its exposure to growing Asian markets and further its Smart brand while Mitsubishi will enhance its presence throughout Europe and North America.

This deal will give the companies a 10.8% market share in Japan and 9.4% through other parts of Asia.

DaimlerChrysler will be granted a membership on Mitsubishi's board proportional to its equity participation, according to the statement. (DaimlerChrysler shares closed down 5/16, or 1%, at 67 3/16).