Daimler To Spinoff Part Of Its Truck Business Through IPO

Ruben Onsu

18 February 2020, Baden-Wuerttemberg, Stuttgart: A Mercedes-Benz Actros is standing in a wind tunnel … [+] at the Untertürkheim plant of Daimler AG during a guided tour of the annual press conference of Daimler Truck AG. Photo: Marijan Murat/dpa (Photo by Marijan Murat/picture alliance via Getty Images) dpa/picture alliance via […]

Daimler AG, manufacturer of Mercedes-Benz luxury cars, will evaluate spinning off its heavy truck business in an initial public offering, the company said Wednesday after a meeting of its supervisory board.

“This is a historic moment for Daimler. It represents the start of a profound reshaping of the company,” said Ola Källenius, chairman of the Daimler’s board of management, in a statement. “Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs.”

Daimler shares rose more than 8% to 64. 36 euros before the close of trading.

The company could sell a minority stake in its truck business as early as the second half of 2021, if it chooses to pursue the spinoff, Bloomberg reported.

The transaction would need the approval of Daimler shareholders, who could hold a special meeting by the end of September, the company said in a release. The shares would be traded on the Frankfurt stock exchange.

Both Mercedes-Benz and Daimler Truck would be supported by dedicated financial services and mobility service entities.

“This is a pivotal moment for Daimler Truck,’ said Martin Daum, chairman of Daimler Truck’s board of management. “With independence comes greater opportunity, greater visibility and transparency. We will grow further and continue our leadership in alternative powertrains and automation. We have already defined the future of our business with battery-electric and fuel-cell trucks, as well as strong positions in autonomous driving.”

Deutsche Bank analysts projected in a study released last month that Daimler’s truck business could be worth about $25 billion (29 billion euros) at multiples comparable to Volvo AB, one of its competitors.

Volkswagen completed an IPO of its Traton SE truck division in 2019. It is currently valued at about 11.6 billion euros ($13.9 billion). Last year Traton acquired Navistar International
NAV
, a deal that will enable it to compete with Daimler Trucks and Volvo AB in North America.

Daimler is the world’s largest manufacturer of trucks and buses, with more than 35 locations globally. It has more than 100,000 employees and encompasses seven brands: BharatBenz, Freightliner, Fuso, Mercedes-Benz, Setra, Thomas Built Buses and Western Star.

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