By Christoph Steitz

FRANKFURT (Reuters) -Daimler will retain a 35% stake in the trucks division it designs to spin off this yr, the luxurious carmaker claimed on Friday, supplying a lot more specifics on a landmark corporate break up it hopes will strengthen share values.

The spinoff of Daimler Truck Keeping AG as a individual stated entity, initially declared in February, will be voted on by Daimler shareholders at an incredible common meeting on Oct. 1.

They will acquire one share in the vans division for each and every two Daimler shares they own.

Daimler, in convert, will be renamed Mercedes-Benz Team AG to reflect its aim on the car and van organization, which includes the Mercedes-Benz brand name, and efforts to problem Tesla and other rivals in the market place for electric powered top quality cars and trucks.

“Daimler’s realignment tends to make one particular results story into two,” Daimler Chief Executive Ola Kaellenius said.

“With this courageous move into a new upcoming, we are making included value with two pure-engage in firms for our clients, workers, shareholders and associates.”

Daimler will supply Daimler Truck Keeping AG with net liquidity of 5 billion euros ($5.9 billion) till the stop of the calendar year, when the truckmaker’s shares are anticipated to commence trading, so that it can accomplish an investment-grade rating.

Spin-offs, less than which current shareholders get shares in the new vehicle for free, have been a outstanding way for huge corporations to unlock price and react to traders demanding a sharper company product.

Daimler shares are up about 17% because the spin-off announcement, in line with the broader European automotive sector.

“Up until now, we had to travel in a convoy. In the long run, we will be in a position to system our very own route and opt for the finest route for us,” stated Martin Daum, designated chief executive of Daimler Truck Holding AG.

Of the 35% Daimler strategies to keep in the division, which is the world’s most significant truck and bus maker and will be a contender for Germany’s blue-chip DAX index, 5% will be transferred to the carmaker’s pension fund.

As of Jan. 1 2021, Daimler Truck Holding AG shareholders’ equity on a professional-forma foundation stood at about 11.1 billion euros, equal to an equity ratio of 22%, Daimler reported.

($1 = .8418 euros)

(Reporting by Christoph Steitz Enhancing by Douglas Busvine and Keith Weir)