Tognum falls to raised £3bn offer

Rolls-Royce and Daimler have seized control of German engine maker Tognum after their improved €3.4 bn (£3bn) offer was accepted by nearly 60 per cent of shareholders.

Tognum last month rejected a €24-a-share bid, saying it undervalued the company, but an improved offer of €26 was accepted by 58.35 per cent of shareholders, after winning the support of the management.

Rolls and Mercedes Benz's owner Daimler have bought a further 1.5 per cent of the shares on the stock market, which gives them control of 59.9 per cent of the stock.

In one of the biggest deals in its 100-year history, Rolls plans to combine Tognum with its own Bergen business, which makes engines used across the maritime and power-generation sectors.

The car giant Daimler already owns 28.4 per cent of Tognum, which is best known as a supplier of engines for ships and trains through its MTU subsidiary. The deal will allow Daimler to forge closer ties with Tognum, which is one of its biggest buyers of engines.

Rolls said the news laid a strong foundation for the co-operation of the three companies. It estimates the market is worth more than €30bn a year.

Tognum, which employs some 9,000 people and specialises in high-speed diesel engines and propulsion systems, generated revenues of €2.5bn in 2009. It recently celebrated its centenary, having started out as a maker of engines for airships in 1909.