Germany’s Daimler AG said it is taking steps focus and strengthen its corporate structure through the creation of legally independent entities. In addition to the existing legally independent division Financial Services, the Mercedes-Benz Cars & Vans as well as Daimler Trucks & Buses will be transferred into two legally independent entities to “take greater entrepreneurial responsibility,” the Stuttgart-based manufacturer said.
Until now, neither the board of management nor the supervisory board of Daimler AG has made a final decision on implementing the new structure for the Daimler Group. Both boards will come to a final resolution after the ongoing assessments and negotiations have been completed, such as tax-related issues or a comprehensive due diligence. Should the board of management and supervisory board decide to finally implement the new Group structure, those measures would require the approval of a shareholders’ meeting of Daimler AG. Such a motion could be voted on at the earliest at a shareholders’ meeting in the year 2019.
Daimler said the split does not mean it is planning to divest itself of any of the three groups. “This project intends to strengthen the future viability of the business units and better utilize the potential for growth and earnings in the various markets. Safeguarding Daimler’s future is based on three pillars: protecting and increasing the company’s success, pushing forward with shaping the future for the employees, and ensuring the long-term commitment of investors,” the company said in its announcement.
“Daimler is today facing an exceptional challenge: On the one hand, we are more successful than ever before; on the other hand, our business is changing like never before,” stated Dr. Dieter Zetsche, chairman of the board of management of Daimler AG and Head of Mercedes-Benz Cars. “Whoever aims for sustainable competitiveness and profitability must continuously evolve and adapt to rapidly changing surroundings – technologically, culturally and also structurally. We are following a straight-forward strategy and have decided to examine a new divisional structure for our company against this backdrop, to make sure we are optimally prepared for the challenges in the new automotive era.”
Daimler would thus be comprised of three independent entities: Mercedes-Benz Cars & Vans and Daimler Trucks & Buses as two new entities, and the existing legally independent Daimler Financial Services AG. The three entities would continue to have their registered offices in Germany.
In connection with the balance of interests, Daimler plans a contribution of €3.0 billion from liquid funds to the German pension fund of Daimler AG in the fourth quarter 2017, subject to the approval of the supervisory board. This is to increase to funded status of the pension obligations. Furthermore, the company is reinforcing its employees’ pension commitments and intends to contribute to the strengthening Daimler’s A-Rating.