Daimler's pension fund gets 1.8 billion euro Renault-Nissan stake
FRANKFURT -- Daimler topped up its German pension scheme by transferring a stake in Renault and Nissan Motor Co. worth about 1.8 billion euros ($2 billion) to the fund on Wednesday.
Companies are having to look for ways to cope with pension liabilities which have ballooned because low central bank interest rates have cut investment returns, creating funding gaps in many pension schemes.
"With this contribution we are again reinforcing our pension assets … our aim in this is to safeguard our employees' pension benefits for the long term,” Daimler CEO Dieter Zetsche said in a statement. The CEO added that regardless of the share transfer Daimler will continue its strategic alliance with Renault-Nissan.
Daimler said the transfer would result in a one-time positive impact to its 2016 earnings before interest and taxes (EBIT) of about 500 million euros.
The German carmaker has already topped up its German pension fund to help to meet long-term payout obligations. It made a 1 billion euros contribution in December 2015, and a 2.5 billion euros payment in 2014.
Daimler acquired 3.1 percent in the share capital of Renault and Nissan in 2010 as part of a reciprocal investment to accompany a strategic partnership for sharing engines, platforms and manufacturing facilities between Renault-Nissan and Daimler.
Earlier this year, Daimler expressed concerns about the French government's attempts to increase its voting rights in the French carmaker because of a divergence from the "one-share, one-vote principle."
The French government, which recently increased its stake in Renault, proposed introducing a law to grant double voting rights to long-term shareholders.