Daimler starts reorganisation that could lead to break up

Daimler  has started the process of creating separate legal entities for its Mercedes Benz cars and Daimler Trucks divisions, a move that has fuelled speculation of an eventual break up of the German automaker.

FILE PHOTO: The Mercedes star logo of an E Coupe is pictured before the annual news conference of Daimler AG in Stuttgart, Germany, February 2, 2017. REUTERS/Michaela Rehle/File Photo

The company said on Monday it would invest more than 100 million euros in preparations for the reorganisation. It added it did not plan to divest any of its divisions and no final decisions had been made.

It also said it had reached an agreement with labour representatives that will see job guarantees extended until the end of 2029; a 3 billion euro ($3.5 billion) contribution made to the group’s pension fund; and an extension of a profit-sharing bonus.

CEO Dieter Zetsche said in July that Daimler was considering putting parts of its business into separate legal entities, spurring talk of a possible break up as the group looks to fund big investments in autonomous and electric cars.

The company said in a separate statement on Monday that it was not pursuing any savings, efficiencies or job cuts related to the reorganisation.

Separating Daimler’s divisions could make it easier to value them and create a higher figure than for the current combined whole, with trucks and buses on their own worth 31 billion euros, analysts at Evercore ISI have said.

The German company’s total market value is around 72.7 billion euros, according to Thomson Reuters data.

Fuente: Reuters