Daimler, Rolls-Royce to bid $4 billion for Tognum

FRANKFURT Wed Mar 9, 2011 5:09am EST

Dieter Zetsche, CEO of German car manufacturer Daimler AG, talks to media during the annual news conference in Stuttgart, February 16, 2011. REUTERS/Alex Domanski

Dieter Zetsche, CEO of German car manufacturer Daimler AG, talks to media during the annual news conference in Stuttgart, February 16, 2011.

Credit: Reuters/Alex Domanski

FRANKFURT (Reuters) - German automotive group Daimler and British aerospace engine manufacturer Rolls-Royce said they would bid 3.2 billion euros ($4.44 billion) for industrial diesel engine maker Tognum.

Under the deal, first announced on Monday, stockholders can tender their shares for 24 euros each. Tognum shares closed at 23.215 euros on Tuesday but have jumped by more than a quarter over the past five days.

The agreement is contingent on Daimler and Rolls-Royce gaining control of at least half the equity plus one share.

Daimler will contribute its 28.4 percent stake into a joint venture that will make the offer to Tognum shareholders.

"The complementary capabilities we are bringing together will provide us with a world leading proposition and will enable us to expand the business by developing a broader portfolio of integrated power systems and services for existing and new customers," said Rolls-Royce Chief Executive John Rose in a statement on Wednesday.

The companies intend to maintain the current manufacturing sites and are confident that the growth strategy will secure jobs, it added.

As part of the deal, Rolls-Royce plans to contribute its Bergen gas and diesel medium-speed engine business used in the marine propulsion and auxiliary power markets.

(Reporting by Christiaan Hetzner)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.