Daimler Could Soon Split From Mercedes-Benz. Here's Why

Daimler has started the process of creating separate legal entities for its Mercedes Benz cars and Daimler Trucks divisions, a move that has fueled speculation of an eventual break-up of the German automaker. The company said on Monday it would invest more than 100 million euros in preparations for the reorganization. It added it did not plan to divest any of its divisions and no final decisions had been made.

Also Read: Batman To Drive Mercedes-AMG Vision Gran Turismo In Justice League

It also said it had reached an agreement with labor representatives that will see job guarantees extended until the end of 2029; a 3 billion euro ($3.5 billion) contribution made to the group's pension fund; and an extension of a profit-sharing bonus.

CEO Dieter Zetsche said in July that Daimler was considering putting parts of its business into separate legal entities, spurring talk of a possible break up as the group looks to fund big investments in autonomous and electric cars.

The company said in a separate statement on Monday that it was not pursuing any savings, efficiencies or job cuts related to the reorganization.

Separating Daimler's divisions could make it easier to value them and create a higher figure than for the current combined whole, with trucks and buses on their own worth 31 billion euros, analysts at Evercore ISI have said.

Also Read: Mercedes-Benz India Starts Off Festivities With Record 51 Cars Delivery In Kolkata

The German company's total market value is around 72.7 billion euros, according to Thomson Reuter's data.

(Reporting by Victoria Bryan; Editing by Maria Sheahan and Mark Potter)

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)