Iveco Truck Spinoff Targets Growth in Challenging Industry Shift
(Bloomberg) — CNH Industrial NV’s Iveco Group NV will start trading later Monday in Milan, following Daimler AG’s spinoff of its truck division to better confront the industry’s move away from diesel engines. Controlled by Italy’s billionaire Agnelli family, CNH aims to extract more value from separated agricultural equipment brands like New Holland and its truck- and bus-making unit. Iveco targets raising net sales from industrial activities to as much as 17.5 billion euros (£19.9 billion) by 2026 from 11.8 billion in 2019, the company said in November.
The spinoff comes after talks last year for a sale to China FAW Group Co. fell apart because of disagreements over price and after the Italian government signaled it would oppose the deal. CNH initially detailed plans for the separation in 2019. Both Iveco and Daimler Truck Holding AG are hoping to gain speed as standalone companies in the switch to batteries and hydrogen fuel-cell powertrains amid tightening regulation on greenhouse gas emissions.
The costly shift away from eking out better diesel-engine performance for haulage companies and offering autonomous driving features is also opening the door to new competitors like Tesla Inc. and Nikola Corp. Iveco has partnered with U.S. startup Nikola to make trucks at its plant in Ulm, Germany, where production was scheduled to get underway for battery-electric heavy-duty vehicles late last year, followed by fuel-cell trucks at a later date. In November, Iveco also announced it will supply Amazon.com Inc. with more than 1,000 gas-powered vehicles in Europe.
The company is seeking more commercial partnerships, according to Chief Executive Officer designate Gerrit Marx. Daimler Truck, the world’s biggest commercial vehicle maker, is currently valued at about 27 billion euros and has gained nearly 6% since its trading start on Dec.
10. The separation of the maker of Mercedes-Benz luxury cars and commercial vehicles after a century under the same roof follows the divergent trends in future technology for both autos and trucks, Daimler CEO Ola Kallenius has said.
Iveco, which stands for Industrial Vehicles Corporation, was formed in 1975 from parent Fiat to serve the European truck and bus market. At that time Iveco included five brands including Fiat Veicoli Industriali, Unic and Magirus Deutz. Investors will receive one Iveco share for every five CNH common shares held.
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