Rolls-Royce and Daimler bid ¤3.2bn for Tognum
Thursday 10 March 2011
The engineering giant Rolls-Royce and the German car group Daimler are offering €3.2bn (£2.7bn) for the engine-maker Tognum.
If the deal goes ahead, it will create a joint venture – including Rolls-Royce's Bergen engine business and Daimler's existing 28 per cent stake in Tognum – which will be listed on the Frankfurt Stock Exchange, the two companies said.
The €24-per-share offer to Tognum investors represents a 30 per cent premium on the stock price on the last trading day before rumours of a potential bid reached the markets at the start of this week. But some analysts expect Rolls-Royce and Daimler will have to increase their offer to secure the sale.
Tognum specialises in engines and propulsion systems for ships, trains and industrial vehicles. Together with Bergen, the new joint venture will focus on fast-growing markets, particularly in developing countries, maintaining Tognum's existing manufacturing sites and securing future jobs, the two suitors said yesterday. Sir John Rose, the chief executive of Rolls-Royce, stressed the fit between the businesses.
"This is a significant opportunity to harness the innovation, technology and engineering expertise of Rolls-Royce, Daimler and Tognum," he said. "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."
The Tognum joint venture would boost Rolls-Royce's already fast-growing presence in the marine sector. The division's revenues have grown at a compound annual rate of 21 per cent over the two decades since the company bought into the sector with the acquisition of Vickers. And at an investor meeting in November, John Paterson, the president of Rolls-Royce marine, forecast $340bn (£210bn) of opportunities over the next 20 years.
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