Daimler shareholders agree to separate the truck and luxury car segments

Daimler shareholders agree to separate the truck and luxury car segments
Daimler shareholders agree to separate the truck and luxury car segments

Shareholders of the German company Daimler agreed today to separate the company’s truck segment from the Mercedes-Benz luxury car segment in order to increase the value of the two companies.
The Chairman of the Supervisory and Oversight Board, Bernd Bechtsrieder, announced that the plan was approved by 99.9% of shareholders during an extraordinary general meeting held online today.
The extraordinary meeting began at 10 am (0800 GMT) online due to restrictions related to the coronavirus.
There has been debate for some time about turning the trucking business into a separate entity. Proponents argue that the new company, which will cost around 700 million euros to set up, will be more independent and thus more profitable.
“We will secure existing jobs and create new ones,” CEO Ola Kilinios told shareholders during the meeting, adding that the auto division and the truck and bus division are completely different, and it is better to separate them as separate entities.
According to local media reports, the plan was drawn up in light of the deep turmoil in the auto industry related to the promotion of electric cars.
Ahead of the extraordinary shareholder meeting, Ingo Spich, director of Germany’s DECA investment fund, stated that the move aims to increase response to new industrial trends, such as self-driving cars and relying on battery power to power cars, as well as investors’ efforts to bring more transparency and improvements to the profitable truck unit. low.
Speach added in a statement reported by Bloomberg that the profit margin for the luxury brand is very low, as the cost-cutting program did not work in the truck sector, and only helped the passenger car unit, adding that improving results would be an important element because the separation of the two sectors makes Daimler more vulnerable to attacks by activists. and acquisition attempts.
Separating the truck business is the most important strategic move Daimler has taken since selling Chrysler in 2007, and an important element in CEO Ola Kilinius’ drive to transform the luxury carmaker into a more flexible company.
Daimler’s stock returns and value began to decline in the late 13-year term of former CEO Dieter Zetsche, prompting Kilinius to make bold decisions in light of the fundamental changes that have swept the auto industry.

Source

Daimler shareholders agree separate truck luxury car segments

 
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