Daimler has announced plans to separate into two pure-play companies as it readies to accelerate into a zero-emission and softwaredriven future.

Daimler is planning a fundamental change to its structure, designed to “unlock the full potential of its businesses in a zero-emissions, softwaredriven future”. The supervisory board and management of Daimler have agreed to evaluate a spin-off of its Truck and Bus business and begin preparations for a separate Daimler Truck listing. The new business will have fully independent management and standalone corporate governance, including an independent chairman of the supervisory board. Daimler also intends to rename itself as Mercedes- Benz at the appropriate time.

Why the split?
Ola Källenius, board chairman of Daimler and Mercedes- Benz, says now is a historic time for Daimler. “It represents the start of a profound reshaping of the company.” The need has come about because the industries and customers between its passenger and vocational divisions are more divergent than ever. “Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs. 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,” explains Källenius. As part of a more focussed corporate structure, both Mercedes-Benz and Daimler Truck will also be supported by dedicated captive financial and mobility service entities. These will drive sales with tailor-made financing, leasing and mobility solutions, increasing retention and building customer loyalty.

Accelerating growth and new technologies
According to the company, Daimler Truck intends to generate value for its shareholders by accelerating the execution of its strategic plans, raising its profitability and moving forward with its development of emissionsfree technologies for trucks and buses. “This is a pivotal moment for Daimler Truck. With independence comes greater opportunity, greater visibility and transparency,” says Martin Daum, member of the Daimler board of management and Daimler Truck chairman of the board of management. “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 rapidly to bring best-in-class products to our customers.” Daum says that Daimler Truck has a solid financial basis and robust business model. The company has clear strategies to raise its financial performance and accelerate its execution. “We will use our strong and wellknown global brands, our scale and our exceptional technology to deliver industryleading return,” he says.

Keeping pace with the industry
A €1.5 billion fund, in addition to current financial plans, will be set up for Daimler Truck to encourage bold and quick investment in innovation so the companies can keep pace with the rapid transformation of the industry. Michael Brecht, chairman of Daimler‘s General Works Council, says that this will enable investment in new products and technologies and provide additional support for the company‘s branches, helping to secure employment. “In addition, collective bargaining deals such as our labour agreements will continue to apply until the end of the decade. “We will continue to do everything in our power to uphold the interests of our colleagues. We have the unique opportunity to proactively and sustainably shape our commercial vehicle sites – from production to the service business – to help write the next chapter of the Daimler Truck success story,” Brecht says.

Making even stronger companies
Manfred Bischoff, chairman of Daimler‘s supervisory board, says Mercedes-Benz and Daimler Truck enter this transformation with significant strengths, and the company is convinced they will emerge even stronger, serving their respective customers as independent companies. “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 focussed, pure-play businesses,” Bischoff says. The intended structure of the transaction would involve Daimler transferring the majority of Daimler Truck to its shareholders on a prorata basis in accordance with existing shareholdings, but it intends to retain a minority shareholding. Representation of Daimler on the Daimler Truck supervisory board will be in line with the intended deconsolidation. The target is that the business will qualify as a DAX company on the Frankfurt Stock Exchange. (The transaction and the listing of Daimler Truck on the Frankfurt Stock Exchange is expected to be complete before the end of 2021.) The process to finalise the planned transaction has only just begun, so Daimler is providing no other details at this time. All further information and the final decision on the spin-off has to be made at an extraordinary shareholder meeting of Daimler, planned for the third quarter of 2021. Mandatory approval is required for the plan to go ahead.