Daimler Group Plans Spin-Off and IPO of Daimler Truck

The Daimler Group plans to split its industrial businesses into two independent companies. A spin-off of Daimler Truck with its own stock listing is planned. The remaining part of Daimler is to be renamed Mercedes-Benz at a later date. Daimler Truck, as the world’s largest and technologically leading manufacturer of trucks and buses, will accelerate its path towards emission-free freight and passenger transport. The IPO is expected to be completed by the end of 2021.

(Stuttgart) Daimler is planning a fundamental change in its corporate structure to fully exploit the potential of its business areas in the future, which will be software-driven and emission-free. The Supervisory Board and Executive Board of Daimler have decided today to evaluate a spin-off of the Truck & Bus business and to begin preparations for an independent IPO of Daimler Truck. The intention is for the majority stake in Daimler Truck to be transferred to current Daimler shareholders. As part of this, Daimler Truck will gain full entrepreneurial freedom and have an independent corporate governance structure with an independent chairman of the supervisory board. It is also aimed that Daimler Truck will meet the criteria for inclusion in the DAX. According to current planning, the transaction is to be completed by the end of 2021, at which point Daimler Truck is to be listed on the Frankfurt Stock Exchange for the first time. Furthermore, Daimler intends to rename itself Mercedes-Benz at a later date.

Simplification of the Daimler Structure: Two Strong and Independent Companies

“This is a historic moment for Daimler and the beginning of a profound transformation of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses operate in different industries with specific customer groups, technology paths, and capital requirements. Mercedes-Benz is the most valuable luxury car brand, offering discerning customers the most desirable cars in the world. Daimler Truck provides customers with a variety of industry-leading transport solutions and services. Both companies operate in industries that are undergoing comprehensive technological and structural changes. They can manage this transformation significantly more effectively if they act as independent units – with strong net liquidity and without the constraints of a conglomerate structure,” says Ola Källenius, Chairman of the Board of Daimler and Mercedes-Benz.

As part of this restructuring, support from financial and mobility service companies is planned for both Mercedes-Benz and Daimler Truck. These will support sales with tailored financing, leasing, and mobility solutions, as well as strengthen customer satisfaction and loyalty. To this end, the company intends to assign the capacities and teams of today’s Daimler Mobility to both Mercedes-Benz and Daimler Truck.

“We believe in the financial and operational strength of our two industrial business areas. And we are convinced: With independent management and an independent governance structure, both units will be able to act even faster, invest more ambitiously, and drive growth and collaborations more effectively – all of which makes them significantly stronger and more competitive,” adds Källenius.

Daimler Truck Aims for Growth and New Technologies

Daimler Truck intends to create value for its shareholders by implementing its strategic plans even faster, increasing profitability, and further advancing the development of emission-free drive technologies for trucks and buses.

“This is a pivotal moment for Daimler Truck. With independence, we gain new opportunities, visibility, and transparency. We will continue to grow and want to remain leaders in alternative drives and automation. With our battery-electric and fuel cell-driven trucks, as well as our strong position in automated driving, we have already clearly defined what the future of our business will look like. Through targeted partnerships, we will accelerate further technology development to quickly offer our customers top-notch products,” says Martin Daum, Board Member of Daimler and Chairman of Daimler Truck.

Daimler Truck is facing a spin-off with an IPO

“Daimler Truck is already on a solid financial foundation, our business model is robust. We will continue to work on our cash flow management and know how to handle the industry-standard market cycles. We have proven this again during the sharp global market decline associated with COVID-19. We have clear strategies to enhance our financial performance and to implement our roadmap more quickly. We will leverage the strength of our strong and well-known global brands, as well as our economies of scale and technology expertise, to also be a leader in returns in the future,” adds Daum.

Daimler Truck is the world’s largest manufacturer of trucks and buses with leading market positions in Europe, North America, and Asia, and has more than 35 main locations worldwide. With over 100,000 employees, Daimler Truck unites seven brands under one roof: BharatBenz, Freightliner, Fuso, Mercedes-Benz, Setra, Thomas Built Buses, and Western Star. In 2019, Daimler Truck delivered approximately half a million trucks and buses to customers. Revenue in 2019 amounted to €40.2 billion for Daimler Trucks and €4.7 billion for Daimler Buses. EBIT was €2.5 billion for Daimler Trucks and €283 million for Daimler Buses.

Important Step for Customers, Shareholders, and Employees

Manfred Bischoff, Chairman of the Supervisory Board of Daimler, sees the planned IPO as an important step to generate value: “Mercedes-Benz and Daimler Truck are entering this transformation with enormous strength. We are convinced that they will be even stronger as independent companies and will be able to serve their respective customers even better. Given the different return profiles and capital needs, the advantages of splitting into two independent units are clear. We are confident that the capital markets will appreciate the opportunity to invest in clearly focused ‘Pure Play’ companies. The final decision on a spin-off must be made at an extraordinary general meeting – this is to take place in the third quarter of 2021.”

Michael Brecht, Chairman of the General Works Council of Daimler, also clearly supports the plans: “The transformation of our industry is progressing rapidly. To keep pace, we need to be bolder and make faster decisions to invest in innovations. To this end, we will establish an additional innovation fund with a volume of €1.5 billion for Daimler Truck, in addition to the current financial planning. This will allow us to invest in new products and technologies, and we will actively contribute our ideas. This brings additional perspectives for our locations and secures employment. Furthermore, company agreements such as our future security until the end of the decade will continue to apply. The planned independence brings many advantages for Mercedes-Benz and Daimler Truck, and we will continue to fight with all our strength for the interests of our colleagues. We have the unique opportunity to actively and sustainably shape the commercial vehicle locations – from production to service business – to help write the next chapter of Daimler Truck’s success story.”

Extraordinary General Meeting in Q3

It is intended that Daimler will transfer the majority of Daimler Truck to its shareholders as part of the planned transaction. The number of Daimler Truck shares that Daimler shareholders would then receive will be based on the extent of their previous participation. Daimler intends to retain a minority stake in Daimler Truck. Accordingly, Daimler’s representation on the supervisory board of Daimler Truck will reflect the planned deconsolidation.

The decision made now marks the beginning of a process to concretize the planned transaction. The full details regarding the financial and technical implementation will therefore only be available at a later date. This concerns, for example, the question of how large the stake in Daimler Truck will be that is to be traded on the stock exchange in the future, or the question of how the shares of Daimler Truck will be allocated to Daimler shareholders.

All further details of the planned business split are to be presented to Daimler shareholders at an extraordinary general meeting in the third quarter of 2021. At this meeting, the mandatory approval of the shareholders for the planned project will also be sought.

https://www.daimler.com/projekt-fokus/

Photos: Mercedes Benz Truck

www.daimler-truck.com