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October 1, 2021 9:45 AM, EDT

Daimler Investors Approve Plan to Split Mercedes From Trucks

Spinoff Will Be Complete by End of the Year
Ola Kallenius Daimler Chairman Ola Källenius. (Daimler AG)

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Shareholders of Daimler AG in a widely anticipated vote agreed to realign the company by spinning off its truck and bus unit by the end of the year to form Daimler Truck Holding AG, which will be publicly traded on the Frankfurt Stock Exchange.

Also, Daimler AG will be renamed Mercedes-Benz Group AG effective Feb. 1.

Martin Daum, chairman of Daimler Truck Holding AG, promised shareholders of the soon-to-be independent and likely increasingly entrepreneurial truck unit the best products, an attractive return and sustainable jobs.

“That’s why we are accelerating the development of battery and fuel cell vehicles in all segments along the way to emission-free transport. As an independent company, we will be able to make even greater use of our growth opportunities and further increase our financial success,” Daum said in a statement.

Daimler is the leader in the global commercial vehicle business in terms of sales, market share and global reach, according to the Stuttgart, Germany-based company. It generates about $48.8 billion in revenue and sells more than half a million trucks and buses in a typical year.

Martin Daum

Daum

Earlier this year, Daum said electric vehicles will be the heart of the new company with the eventual “ramp down” of internal combustion engines.

Daimler's market position includes a 40% share of U.S. Class 8 retail sales through its most profitable unit, Daimler Trucks North America.

Zero-emission trucks will begin “a massive ramp up” in the 2025-35 period, with the two types in a 50-50 vehicle mix, which then will be sorted out, said Daum said, who called the shift to autonomous trucks “the Holy Grail.”

For fuel cell trucks, deploying the hydrogen infrastructure will take longer, but ultimately there will be millions of fuel cell trucks, he said.

This spring, Roman Mathyssek, a consultant at Arthur D. Little, told Bloomberg News: “Being the largest truck producer in the world, Daimler Truck clearly has the potential to perform on par with the most profitable truck manufacturers.”

More recently, Daimler rival Traton SE abruptly replaced its two top executives, the second such shakeup at the truck business since its underwhelming initial public offering in 2019, Bloomberg reported. The stock has failed to take off in part because of a small free float, with parent Volkswagen AG still holding about 90% of shares.

Mercedes logo

Mercedes logo by David Zalubowski/Associated Press

Under the new arrangement at Daimler, the company reported shareholders will have a 65% stake in Daimler Truck Holding AG. As consideration for the spin-off, Daimler shareholders are to receive one additional share in Daimler Truck Holding AG for every two shares they hold in Daimler AG.

Daimler will retain a 35% interest in Daimler Truck Holding AG and plans to transfer 5% to Daimler Pension Trust e.V., a registered association according to German law.

Michael Brecht, chairman of the General Works Council of Daimler AG, called the employees “the most valuable asset of both companies.”

“Our colleagues make financial success possible. As labor representatives, we will continue ensuring that employee interests are strongly represented,” he said. “A strong sign of this is the willingness to invest and safeguard our plants so that we can concentrate on our work in a focused manner and without worrying about losing jobs. We have achieved this, and we look with confidence to a future that will now give us even more opportunities.”

Daimler first announced the intention to split up into the world’s largest makers of luxury cars and commercial vehicles in February.

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