Daimler shareholders overwhelmingly back truck spin-off

Frankfurt

SHAREHOLDERS in German auto giant Daimler on Friday overwhelmingly backed spinning off the group's truck division, separating it from the luxury car business that will be renamed Mercedes-Benz.

Investors at an extraordinary general meeting, held virtually, voted 99.9 per cent in favour of both the spin-off and the name change, said Bernd Pischetsrieder, chairman of Daimler's supervisory board.

The group now intends to list its trucks and bus unit on the Frankfurt stock exchange as Daimler Truck by the end of the year.

The remaining car and van business will be renamed Mercedes-Benz after Daimler's top-selling luxury vehicle from Feb 1, 2022.

Addressing shareholders, chief executive Ola Kallenius said the landmark separation would allow each company to be more agile and focus on new technologies best suited to their individual needs.

"Trucks and cars are two completely different businesses," he said.

Not only do they have different customers, he said, but in the industry transition away from fossil fuel engines, cars are firmly on the path to a battery-powered future, while hydrogen fuel cells could "play an important role" for trucks.

The plan to split the company will be the biggest overhaul at Daimler since the group sold Chrysler in 2007.

"Today is a truly historic day," said Martin Daum, head of Daimler's truck division, adding that the spin-off would increase growth opportunities and profitability.

Under the proposed reorganisation, Daimler's existing shareholders will hold a 65 per cent stake in Daimler Truck.

The new Mercedes-Benz company will retain a 35 per cent stake in the truck spin-off.

Daimler's trucks unit posted revenues of around 35 billion euros (S$55 billion) last year and an operating profit of 525 million euros, putting it on track for a listing on Frankfurt's blue-chip DAX index. AFP