By Nina Trentmann 

Daimler AG's finance chief is divvying up the car maker's books, debts and finance workers ahead of the spinoff of the company's trucks business later this year.

Daimler, the conglomerate behind the Mercedes-Benz luxury brand, in February said it plans to hand over a majority of shares in its business that manufactures trucks and buses to shareholders. The move, which is aimed at boosting the share price, market capitalization and competitiveness of the two entities, still requires approval from investors, which Daimler hopes to gain in the fall.

Harald Wilhelm, who has been the chief financial officer of the Stuttgart, Germany-based firm since 2019, is working on the technical details of the transaction. Daimler hasn't yet disclosed how many shares will be allocated to each business and how much of the truck business it wants to keep. "Daimler will retain a significant minority in the truck unit," Mr. Wilhelm said. The company will host a strategy event for the truck division next week.

Daimler began separating its financial accounts in 2018 when it decided to set up separate legal entities for the different business units, a process that was completed in October 2019. Mr. Wilhelm and his team had to create separate financial statements for those entities for the years 2018, 2019 and 2020, a process that he described as a "hell of a lot of work."

Mr. Wilhelm, whose counterpart on the trucks side is Jochen Götz, also has to reallocate the company's obligations, which largely stem from its financial and mobility services business. About EUR128 billion, equivalent to $155.8 billion, will be taken on by the car business, while the remaining EUR25 billion will be shouldered by the truck business, Mr. Wilhelm said. Both entities will be equipped with sufficient cash, he said. Daimler's net liquidity stood at EUR20.1 billion at the end of March.

Another task is to divide the company's finance organization and to equip the trucks business with its own investor relations and treasury department. Spinning off the truck business will allow Mr. Wilhelm to modernize further the finance function of the car business.

"What sits today at the central and Mercedes level, will be even further streamlined, integrated and simplified," Mr. Wilhelm said. This could involve greater use of robotic process automation and artificial intelligence, as well as changes to budgeting, he said. Daimler in 2020 introduced a new planning framework which could be optimized further, according to the company.

Daimler's finance organization, which has about 1,200 employees globally, will see 20% to 30% of those workers join the truck business. The company's shared service centers, which are based in Germany, Spain and the Philippines and employ more than 3,000 people, will continue to work for both entities. "It depends on the truck entity if they feel comfortable with the level of service," Mr. Wilhelm said.

Setting up the new corporate structure was a complex process that involved dealing with many legal and tax-related questions, said Daniel Schwarz, a managing director at Stifel Europe Bank AG, a subsidiary of financial-services company Stifel Financial Corp.

Mr. Wilhelm also is in the process of reducing fixed costs, an effort that began in 2020 and that is supposed to bring down expenses by more than 20% by 2025. "The finance department is contributing to this effort, " Mr. Wilhelm said.

Analysts said the company has become more disciplined in its spending by using equipment longer and relying more on outside technology providers, among other steps.

The company's shares have appreciated about 27% since the beginning of the year, and traded at EUR72.36 on Tuesday.

"From Daimler to [ Volkswagen AG] and [ General Motors Co.], there is better realization that a strong share price is critical to remain relevant against new entrants," said Philippe Houchois, a managing director at Jefferies Financial Group Inc., referring to Tesla Inc. and other electric car makers.

William Boston contributed to this article.

Write to Nina Trentmann at Nina.Trentmann@wsj.com

 

(END) Dow Jones Newswires

May 12, 2021 07:44 ET (11:44 GMT)

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