- Daimler's decision to break itself up follows the example of other German companies, such as Siemens AG.
- 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.
German carmaker Daimler 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 follows the example of other German companies, such as Siemens AG, after investors pressed boards to break up conglomerates. It also highlights efforts by the Mercedes-Benz luxury car 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.
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 breakup 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 and generated 40.2 billion euros in revenue from trucks and 4.7 billion euros from buses.
In the truck market, Daimler faces traditional rivals such as Sweden's AB Volvo, Volkswagen AG unit Traton and Paccar has been racing to bring to market fully-electric heavy-duty trucks to compete with Tesla's long-awaited Semi truck model.
Truckmakers and suppliers are also working fast to roll out self-driving technology. 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.