Daimler to split into two | Automotive Industry News

Management board chairman Ola Kaellenius: “It represents the start of a profound reshaping of the company”

Daimler announced on Wednesday it plans separation into two “pure-play” companies and a majority listing of Daimler Truck to “accelerate into a zero- emissions and software-driven future”.

The supervisory and management boards agreed to “evaluate” a spin-off of the Truck and Bus business and begin preparations for a separate listing of Daimler Truck with a “significant majority stake” in Truck distributed to Daimler shareholders.

The Truck business will have fully independent management, stand-alone corporate governance including an independent supervisory board chairman and is targeted to qualify as a DAX company. The transaction and the listing on the Frankfurt stock exchange is slated before year-end 2021.

Daimler will also rename itself as Mercedes-Benz “at the appropriate time”.

“This is a historic moment for Daimler,” said management board chairman Ola Kaellenius. “It represents the start of a profound reshaping of the company. 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. 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.”

As part of a more focused corporate structure, both Mercedes-Benz and Daimler Truck will also be supported by dedicated captive financial and mobility service entities, driving sales with tailored financing, leasing and mobility products, increasing retention and building customer loyalty. In this process, the company plans to assign resources and teams from today’s Daimler Mobility to both Mercedes-Benz and Daimler Truck.

“We have confidence in the financial and operational strength of our two vehicle divisions. And we are convinced that independent management and governance will allow them to operate even faster, invest more ambitiously, target growth and cooperation, and thus be significantly more agile and competitive,” added Kaellenius.

Daimler Truck to target growth and accelerate new technology

Daimler Truck said it intends 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 technology for trucks and buses.

“This is a pivotal moment for Daimler Truck. With independence comes greater opportunity, greater visibility and transparency. 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. With targeted partnerships we will accelerate the development of key technologies to bring best-in-class products to our customers rapidly,” said chief Martin Daum.

“Daimler Truck already has a solid financial basis, and our business model is robust. We will continue to work on our cash flow management and we know how to deal with industry market cycles – we have proven that again in the significant COVID-related global market reduction. We have clear strategies to raise our financial performance and accelerate our execution. We will use our strong and well-known global brands, our scale and our exceptional technology to deliver industry-leading returns,” he added.

Manfred Bischoff, chairman of the Daimler supervisory board, sees the planned market listing as an important step to create value: “Mercedes-Benz and Daimler Truck enter this transformation with significant strengths and we are convinced they will emerge even stronger as independent companies, serving their respective customers. With their different return profiles and capital needs, the rationale for two independent entities is evident. We are convinced that the capital markets will appreciate the opportunity to invest in more clearly focused, pure-play businesses. The final decision on the spin-off has to be made by an extra-ordinary shareholder meeting of Daimler, which is planned to take place in Q3 2021.”

Further details will be presented at an extra ordinary shareholder meeting in the third quarter of this year.

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.