HELSINKI Jan 21 British engineering company
Rolls-Royce is expected to make a public offer on the
Finnish ship and power plant engine maker Wartsila, a
newspaper reported on Tuesday, citing unnamed investors.
Rolls-Royce could offer at least 50 euros per Wartsila
share, which would value the company at around 9.9 billion euros
($13.4 billion), Finland's Helsingin Sanomat newspaper said.
It wasn't clear, however, whether the investors had spoken
based on speculation or information from the companies. Shares
in Wartsila were up 1.9 percent at 41.47 euros by 1010 GMT.
Both companies declined to comment on the report.
Earlier this month, the companies said Rolls-Royce had made
a preliminary approach to Wartsila, and added the talks ended
without a deal. Wartsila told Reuters that the British company
had been interested in buying its entire business.
By buying Wartsila, Rolls-Royce - the world's second-largest
aircraft engine maker - would strengthen its marine business,
which had lowered its profit guidance in November.
Such a major deal would require Rolls-Royce to issue debt
but there are few alternatives if it wants to boost its marine
engine business, analysts said.
"There is limited scope for Rolls to do M&A around engines
so doing a deal when debt is cheap is not without merit, and as
far as we know Wartsila has a quality portfolio that probably
has synergy for Rolls' Marine and Power Systems divisions," said
analyst Rob Stallard at RBC Capital Markets.
Wartsila's largest owner, with a stake of 22 percent, is a
joint venture of Fiskars, which is backed by
Finland's Ehrnrooth family, and Investor AB, the
investment arm of Sweden's Wallenberg family.