Germany's Daimler to Spin Off Truck Division and Pursue IPO

Plan to Complete IPO Within the Year
Focus on Premium Electric Vehicles After Spin-off

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Daimler AG, the parent company of Mercedes-Benz, has decided to spin off its truck division. The company plans to pursue an initial public offering (IPO) within the year to enhance shareholder and business value.

According to the Wall Street Journal (WSJ) on the 3rd (local time), Daimler announced in a statement that it will spin off its bus and truck divisions and proceed with the separate listing of "Daimler Truck." An extraordinary general meeting of shareholders for this purpose is scheduled to be held by the end of the third quarter of this year, and Daimler aims to complete the IPO as early as within the year.

Daimler added that it plans to distribute a significant portion of the shares of the spun-off truck business to existing Daimler shareholders.

Following this news, Daimler's stock price rose about 9% in the Frankfurt market on the same day.

Arndt Ellinghorst, an analyst at Bernstein Research, evaluated, "The enterprise value of Daimler's bus and truck division is estimated at 35 billion euros (approximately 47 trillion won), which is not yet reflected in Daimler's current stock price."

Going forward, Daimler plans to focus on developing premium electric vehicles and automotive software. Although Daimler has been promoting the commercialization of electric and autonomous vehicles, it is facing competition from Tesla and Nikola, threatening its position in the industry.

The WSJ reported, "Despite Daimler selling more cars and generating massive profits, Tesla is valued higher in terms of enterprise value."

Daimler has set a goal to increase the proportion of electric vehicle sales to 25% by 2025 and 50% by 2030. In particular, Mercedes-Benz has announced that it will stop selling internal combustion engine vehicles starting in 2040.

Previously, Daimler strengthened the independence of its major business divisions through a new corporate structure adopted at the end of 2019.

Meanwhile, the Daimler Truck division contributed to sales of 488,521 units in 2019, generating revenue of 40.2 billion euros and profits of 2.46 billion euros.

This content was produced with the assistance of AI translation services.