Daimler starts the engine of a monster M&A truck mashup


A new Daimler AG, FUSO battery-powered eCanter urban delivery truck is unveiled at a press conference in New York, the United States, Sept. 14, 2017.

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LONDON, November 11 (Reuters Breakingviews) – Daimler’s truck unit (DAIGn.DE) is ahead of its Italian rival Iveco in the race to commercialize. The German manufacturer packs a punch targets for its industrial vehicle division Thursday, just weeks before it presented a majority stake. Daimler wants an operating profit margin of 10% by 2025, a jump from 7% in the first half of 2021. Iveco, controlled by the Agnelli family CNH Industrial (CNHI.MI), looks a bit more clumsy, with a 3.6% EBIT margin in the first half, according to its prospectusalso filed Thursday.

The spinoffs will create two major European publicly traded truck manufacturers, alongside Swedish Volvo (VOLVb.ST) and Volkswagen (VOWG_p.DE) Traton (8TRA.DE). Suppose Daimler’s sales return to 2019 levels next year and it maintains its margin of 7%. On a multiple of 8, it would be worth 26 billion euros, or nearly a third of the 95 billion euros in market capitalization of its parent company. Yet truck manufacturers are also joining together to prepare for the switch to electric vehicles. Traton recently bought out Navistar; CNH attempted to sell Iveco to Chinese FAW Jiefang. The lists will speed up the negotiation. (By Neil Unmack)

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Editing by Ed Cropley and Karen Kwok

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