Daimler to be renamed Mercedes-Benz as it spins off truck division to focus on EVs
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STUTTGART - German car giant Daimler has announced plans to spin off Daimler Truck, the world's largest truck and bus maker, as it seeks to increase its investor appeal as a focused electric, luxury car business.
Daimler's decision to break itself up highlights the ambition of its Mercedes-Benz brand to challenge Tesla, Porsche, BMW and others in the market for electric, premium vehicles.
"This pure play luxury car company is even more attractive to investors who seek a return in that area," Chief Executive Ola Källenius said during a conference call Wednesday.
Källenius said he expects the standalone Mercedes-Benz business will be seen as competitive with Tesla, and over time earn a higher valuation from investors.
"It's about transformation and winning in electric (vehicles) and car software," he said.
A final decision on the separation will be taken at an extraordinary shareholders' meeting that could be held at the end of the third quarter and the business could be listed on the Frankfurt stock exchange by the end of 2021, Daimler said.
Analysts said the break-up was logical and the truck business did not add to Daimler's share price.
"The outcome is extremely positive for all shareholders," Bernstein analyst Arndt Ellinghorst wrote in a client note, adding there was "very little industrial and cultural logic for combining these two very different businesses".
Daimler Truck delivered around half a million trucks and buses to customers in 2019.
But it has been racing to bring to market fully-electric heavy-duty trucks to compete with Tesla's long-awaited Semi truck model.
Källenius and Daimler Trucks chief Martin Daum told analysts on Wednesday one reason for splitting the businesses was that commercial trucks and luxury cars are pursuing different approaches to slashing carbon emissions.
Heavy truck makers are investing more in hydrogen fuel cell technology to replace internal combustion engines. Luxury vehicle makers are focused on batteries.
Under the planned spin-off, a significant majority stake in Daimler Truck would be distributed to Daimler shareholders.
"We have confidence in the financial and operational strength of our two vehicle divisions," Källenius said.