Daimler plans to spin off Daimler Truck as a separate business and establish two independent pure-play companies, eventually renaming the car part of the business as Mercedes-Benz. The Germany-based company said this “fundamental change in its structure” is “designed to unlock the full potential of its businesses in a zero-emissions, software-driven future.”
In a Feb. 3 news release, the company said Mercedes-Benz “will be the world's pre-eminent luxury car business, committed to leading in electric drive and car software,” while “Daimler Truck will accelerate its path towards zero emissions as the world's largest truck and bus producer and technology leader.”
“Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses, with specific customer groups, technology paths and capital needs,” said Ola Källenius, chairman of the board of management of Daimler and Mercedes-Benz, in the release. “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.”
The Daimler Truck business will have fully independent management and stand-alone corporate governance, including an independent chairman of the supervisory board. The separate listing of Daimler Truck in Frankfurt planned for year-end 2021.
Mercedes-Benz and Daimler Truck will each be supported by dedicated captive financial and mobility service entities. The company plans to assign resources and teams from today's Daimler Mobility to both Mercedes-Benz and Daimler Truck.
The company just two years ago did a different restructuring, splitting it activities into three legally independent entities -- one new company to focus on its car and van business and a second on its truck and bus business. The third was Daimler Financial Services AG, which was renamed Daimler Mobility in that restructuring and handled both car and truck business.
Focusing on Electric, Autonomous Trucks
The new Daimler Truck will accelerate the execution of its strategic plans, according to the announcement, driving forward with its development of emissions-free technologies for trucks and buses.
"This is a pivotal moment for Daimler Truck. With independence comes greater opportunity, greater visibility and transparency,” said Martin Daum, member of the board of management of Daimler and chairman of the board of management of Daimler Truck. “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.”
Daimler Truck is the world's largest truck and bus producer, with industry-leading positions in Europe, North America and Asia, according to the company, and more than 35 main locations around the globe. With more than 100,000 employees, it unites seven brands under one roof: BharatBenz, Freightliner, Fuso, Mercedes-Benz, Setra, Thomas Built Buses and Western Star. In 2019, a total of around half a million trucks and buses were delivered to customers.
Daimler will set up an innovation fund with 1.5 billion euros for Daimler Truck in addition to current financial plans.
“We are convinced that the capital markets will appreciate the opportunity to invest in more clearly focused, pure-play businesses,” said Manfred Bischoff, chairman of the supervisory board of Daimler.
Michael Brecht, chairman of Daimler's General Works Council, explained, "The transformation of our industry is moving ahead quickly. In order for us to keep pace, we need to invest in innovations boldly and more quickly.”
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 the third quarter.