Daimler spinning off truck business, renaming auto operation

Daimler Split

Daimler AG announced this week it will split its commercial vehicle business from its luxury car operation later this year, listing the former as a second unit and renaming the latter as Mercedes-Benz.

The move has been pushed by some Daimler AG investors for years, citing a low valuation for the group company.

In a statement, Daimler AG said it is intended that a significant majority stake in Daimler Truck will be distributed to Daimler shareholders. Additionally, the Daimler Truck business will have fully independent management, stand-alone corporate governance including an independent Chairman of the Supervisory Board, and is targeted to qualify as a DAX company.

The company says the listing of Daimler Truck on the Frankfurt stock exchange is expected to be complete before year-end 2021. The company's automotive business will rename itself as Mercedes-Benz at the appropriate time.

"This is a historic moment for Daimler. It represents the start of a profound reshaping of the company," says Ola Kallenius, chairman of the board of management, Daimler and Mercedes-Benz. "Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs.

"Mercedes-Benz is the world’s most valuable luxury car brand, offering the most desirable cars to discerning customers," Kallenius adds. "Daimler Truck supplies industry leading transportation solutions and services to customers. Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure."

Daimler AG says it plans to assign resources and teams from today’s Daimler Mobility to both Mercedes-Benz and Daimler Truck to maintain the growth trajectories for both operations. And Daimler Truck specifically will continue to generate value for its shareholders by accelerating the execution of its strategic plans, raising its profitability and driving forward with its development of emissions-free technologies for trucks and buses, the company says.

“This is a pivotal moment for Daimler Truck. With independence comes greater opportunity, greater visibility and transparency," says Martin Daum, member of the board of management at Daimler, and chairman of the board of management, Daimler Truck. "We will grow further and continue our leadership in alternative powertrains and automation. We have already defined the future of our business with battery-electric and fuel-cell trucks, as well as strong positions in autonomous driving."

He adds, "With targeted partnerships we will accelerate the development of key technologies to bring best-in-class products to our customers rapidly."

Daimler AG says the intended structure of the transaction would involve Daimler transferring the majority of Daimler Truck to its shareholders on a pro rata basis in accordance with existing shareholdings, but it intends to retain a minority shareholding. Representation of Daimler in the Daimler Truck Supervisory Board will be in line with the intended deconsolidation.

All further details of the intended spin-off would be presented to the shareholders at an extra-ordinary shareholder meeting in Q3 2021, in order to obtain their mandatory approval to the plan, the company says.

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