Daimler Truck, the world’s largest maker of commercial vehicles, began trading on the Frankfurt Stock Exchange on Friday, completing a split-off from Daimler AG.
The long-awaited independence, first discussed in 2014, was a stock listing rather than an initial public offering. Daimler AG, the parent company of luxury passenger carmaker Mercedes-Benz, retains ownership of 35% of Daimler Truck. Shareholders in Daimler received one share in Daimler Truck for every two Daimler AG (OTC: DDAIF) shares owned.
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The separation of business units is in vogue. General Electric (NYSE: GE) is in the process of splitting into three businesses. Daimler Truck competitor Traton Group, made up of Scania, Man and most recently Navistar International, was spun off by Volkswagen AG in 2019.
“We are certain we will create value,” Daimler AG CEO Ola Källenius said at the Frankfurt Stock Exchange, according to Reuters. “Trucks and cars have different requirements. We are thus unleashing the full potential of both companies.”
DTG shares open higher
Daimler Truck shares traded Friday morning at $33.69, up from their opening price of $31.57. Daimler shares, which will be renamed Mercedes-Benz AG next year, traded 14.49% lower at $83.45.
Shares of Daimler Truck, trading under the ticker DTG, likely will be listed on the recently expanded 40-member DAX index as soon as February 2022.
Daimler Truck, which sells under seven brands globally, is targeting double-digit profit margins in 2025 compared to an expected 6-8% this year. Profits are better in North America, where Daimler Truck North America is the market leader with the Freightliner and Western Star brands.
If it hits its margin target, Daimler Truck will invest more in future technologies instead of growing profits, CEO Martin Daum said at a media roundtable after ringing the bell to open trading in Frankfurt.
The company has pledged to be carbon neutral in major markets by 2039. It is pursuing both battery-electric and hydrogen fuel cell powertrains to eventually replace diesel. The initial goal is 60% of trucks running on zero-emission technology by 2030.