BRIEF-Rolls-Royce to buy Daimler stake of power systems unit with cash, borrowing

LONDON, March 7 Fri Mar 7, 2014 12:13pm EST

Related Topics

LONDON, March 7 (Reuters) - British engineering company Rolls-Royce said on Friday it would fund the purchase of German carmaker Daimler's 50 percent stake of a jointly owned power systems company using cash and some borrowing.

Rolls-Royce said it had ample liquidity to take full ownership of the three-year-old joint venture Rolls-Royce Power Systems with Daimler's holding estimated to be worth 1.9 billion pounds ($3.18 billion).

The company said the transaction was expected to be completed within the next six months subject to the usual regulatory approvals.

"Rolls-Royce Power Systems has added scale and capability to our reciprocating engines business," said Chief Executive John Rishton in a statement.

"It has outstanding technology, operates in long term growth markets and has proved a valuable addition to our Marine and Industrial Power Systems division,"

He said the option, which is subject to a formal valuation process, was valued at 1.9 billion pounds on Rolls-Royce's balance sheet, ending December 31 2013.

FILED UNDER: