On December 12, 2008, Daimler AG, Kamaz, Russian Technologies State Corporation and Troika Dialog signed an agreement in Moscow governing the exclusive strategic partnership and outlining the main principles and methods of cooperation between Kamaz shareholders.
Under the terms of the agreement, Daimler will acquire a 10 percent stake in the share capital of Kamaz from Troika Dialog for $250 million to be paid in December 2008. Another one-time payment of up to $50 million will be due in 2012 subject to successful business performance of Kamaz.
In exchange, Daimler AG will receive a seat on the Kamaz Board of Directors. Furthermore other rights of Daimler being a minority shareholder in Kamaz, as well as its status of the exclusive strategic partner will be governed and secured by the agreement signed today.
Consistent implementation of Daimler Trucks’ Global Excellence Strategy
The cooperation with Kamaz will enable Daimler’s truck division - Daimler Trucks - to enter the Russian volume market and is part of the company’s growth strategy in the BRIC countries. The step is another example of the consistent implementation of the Global Excellence strategy, which Daimler Trucks has been successfully pursuing for the past four years. The strategy’s four pillars are the management of market cycles; operational efficiency programs; the exploitation of market potential and new markets (particularly new growth markets such as Russia); and future product generations and technologies.
Technology transfer and creation of joint projects
Kamaz and Daimler are aimed at mutually benefitial cooperation in the sphere of technology transfers and a series of joint projects. Daimler Trucks being the exclusive strategic partner will contribute its advanced technologies to Kamaz. The technology transfers encompass various components, including the cab of the second-generation Mercedes-Benz Actros.
Kamaz has production facilities, sales structures, and a good retail network in Russia. As a result, Kamaz will be an excellent partner for the sale and service of Mitsubishi Fuso trucks to Russian customers and will strongly support the market entry of Mitsubishi Fuso. Also conceivable would be joint projects involving Mercedes-Benz buses.
In view of the expected increases in Russian import duties for vehicles, Daimler Trucks’ holding in Kamaz will give Daimler a further strategic advantage.
“Daimler’s strategic involvement strengthens Kamaz and makes our company internationally competitive,” says Sergei Kogogin, General Director of Kamaz.
“I’m very happy about the conclusion of the holding agreement with Kamaz, especially in view of the difficult economic environment we currently face,” says Andreas Renschler, the Daimler Board of Management member responsible for Daimler Trucks. “It has allowed us to take the first step toward creating a hopefully wider-ranging partnership in which the two companies can share their development, production, and sales expertise.”
Russia is Europe’s largest truck market
Russia has one of the largest regional truck markets in the world, with total sales of more than 154,000 units >6 t in 2007. Despite the current financial and economic crisis, the market is expected to continue to grow over the next few years. Demand will rise particularly in the heavy-duty segment.
Kamaz was transformed into a joint stock company on August 23, 1990. Kamaz vehicles are widely used throughout the CIS and are exported to around 30 countries worldwide. The company is the leading seller of heavy-duty trucks in Russia. Last year the company sold more than 53,000 trucks, posting revenues of $3.8 billion and reaching a market share of over 30%. Today, about 25% of its truck production is being exported — mainly to Kazakhstan, the Ukraine, and Asia.
Daimler Trucks sold 1,300 new vehicles in Russia in 2007. In line with this development, Daimler Trucks is expanding its sales and service network in the country and will also increase the number of Mercedes-Benz service stations in the coming years. Daimler Trucks with its brands Mercedes-Benz, Fuso, and Freightliner is already the leader in the segment for imported preowned trucks.
“This Agreement, reached in conditions of a global financial crisis, carries strategic significance for Russia and the Russian truck industry. It gives testament to a high level of trust toward the Russian machine building industry and the economy in general, and to the readiness of Western companies, despite global stagnation and the unfavorable state of affairs, to invest into the Russian Federation,” announced Sergei Chemezov, General Director of the Russian Technologies State Corporation and Chairman of the Kamaz Board of Directors.
“It goes without saying that this is a landmark transaction for all involved parties: Daimler, Russian Technologies State Corporation, Kamaz, and Troika Dialog as well as for the countries that they represent – Russia and Germany”, said Ruben Vardanian, Chairman of the Board of Directors and CEO, Troika Dialog Group. “We are very glad that despite the current market conditions the parties were able to close this deal. This partnership will allow Kamaz to bring its business to a new level by utilizing experience, technology and know-how of its exclusive strategic partner – Daimler AG – as well as to increase the shareholder value of Kamaz in the long-term perspective.”