Daimler has announced plans to make a “fundamental change” to its structure, saying it will likely spin off its truck division and rename itself as Mercedes-Benz.

The German multinational says the move to create two separate companies is "designed to unlock the full potential" of its businesses in "a zero-emissions, software-driven future”.

“The supervisory board and the board of management of Daimler today agreed to evaluate a spin-off of its Truck and Bus business and begin preparations for a separate listing of Daimler Truck,” the company said in a statement.

“It is intended that a significant majority stake in Daimler Truck will be distributed to Daimler shareholders. The Daimler Truck business will have fully independent management, stand-alone corporate governance including an independent chairman of the supervisory board, and is targeted to qualify as a DAX company.”

The Stuttgart-based firm said the transaction and listing of Daimler Truck on the Frankfurt stock exchange was “expected to be complete before year-end 2021”.

“In addition, it is also Daimler’s intention to rename itself as Mercedes-Benz at the appropriate time,” the company said.

Ola Källenius, chairman of the board of management of Daimler and Mercedes-Benz, said it was a “historic moment for Daimler”.

“It represents the start of a profound reshaping of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs,” he said.

“Mercedes-Benz is the world’s most valuable luxury car brand, offering the most desirable cars to discerning customers. Daimler Truck supplies industry leading transportation solutions and services to customers. Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure,” explained Källenius.

Daimler says further details will be presented at an extraordinary shareholder meeting in the third quarter of 2021.