Daimler will be formally renamed Mercedes-Benz Group on Tuesday – nearly a year after the spin-off of its truck and bus division was announced – in a move its boss hopes will unlock shareholder value for the premium carmaker.
The change is the latest in a string of structural reshuffles for the carmaker that began its life as Daimler-Benz in 1926.
The Mercedes brand, named after the daughter of an automobile entrepreneur friend of founder Karl Benz, had been adopted by Daimler in 1902.
“We have a real chance to raise the multiple,” CEO Ola Källenius told reporters on Friday, without naming a specific target valuation for the firm now worth just under 77 billion euros ($85.7 billion).
Shares of Daimler Truck, spun off in December 2021, have risen slightly since their market debut to trade at 32.23 euros on Friday.
Mercedes-Benz shares, at their highest levels since 2015 in November 2021, reached 74.25 on the day of the split, but have trended slightly lower since to trade at 71.15 euros.
The new name is the most visible symbol of the radical change at the automobile manufacturer, according to the German business newspaper Handelsblatt.
“We didn’t choose the day by chance,” chief executive Ola Källenius told Handelsblatt. The renaming took place exactly 136 years after Benz submitted his patent for the world’s first motor vehicle.
“Investors could start viewing Mercedes as a Lucid Motors or Tesla type and start to give it an EV (electric vehicle) multiple,” Tom Narayan, European automotive analyst at RBC Capital Markets, said.
“But Lucid and Tesla get to start at 100% EV. For Mercedes you have to convert your existing ICE (internal combustion engine) business to EVs. That may be a limitation on how far the multiple could go near-term.”
Daniel Schwarz, management director at Stifel, said valuations reflected the view that German brands were on the defensive, forced to protect their market share.
“Tesla’s valuation is based on the assumption that Tesla will win market share from German manufacturers, who don’t have a comparable revenue growth potential.”
- Reuters, with additional editing by George Russell