Project Description

Daimler Spin-off (Truck Business) Notes

  • Daimler announced that it will spin off a majority stake in its heavy truck business. It had previously been rumured that the the business would go public via an IPO but I view a spin-off as more attractive.
  • The spin-off is expected to take place before year end.
  • The remainco will be renamed Mercedes-Benz.
  • The shares would be traded on the Frankfurt exchange.
  • “Daimler’s truck unit could be worth about 29 billion euros ($35 billion) if valued at multiples similar to Volvo AB, although it would need to substantially improve returns to justify that valuation, Deutsche Bank analysts wrote in a January report. Sanford C. Bernstein estimated Wednesday that the business could be worth 35 billion euros.”
  • Daimler’s current market cap is 69 billion euro.

  • This is Daimler’s current valuation.

  • As you can see, Daimler trades at a cheap valuation (EV/2020 revenue of 0.34x).
  • The benefit of spinning of its Truck division, is Truck companies trade at higher multiples.
  • Navistar International (NAV) is trading at an EV/202 revenue multiple of 1.04x.

  • Traton (Volvo’s trucking business) IPO’d in 2019 and trades an EV/2020 revenue multiple of 1.04x.