Daimler, Rolls-Royce jointly bid for Tognum
German automaker Daimler and Britain's Rolls-Royce announced Wednesday plans to take over Tognum, a German manufacturer of motors and turbines they want to make into a world leader.
Daimler and Rolls-Royce "intend to launch a public tender offer for 100 percent of the share capital of Tognum," a statement said.
They will create a "50:50 joint venture company" to make the bid, offering 24 euros ($33.36) for each Tognum share, and work to make the new entity "a world leading engine systems company."
That price values the company, which would operate in dynamic emerging market economies, at "approximately 3.2 billion euros," the statement added.
The venture "will be able to offer a compelling portfolio of products, services and integrated solutions" in what is known as the "off-highway" sector of marine, energy, defence and industrial applications.
Daimler and Rolls-Royce are also mulling "investment in a new state of the art plant and facilities to enable growth and deliver productivity improvements."
Tognum is based in Friedrichshafen, southern Germany and is a major supplier of engines to Daimler, the world's biggest heavy truck maker.
Daimler already owns 28 percent of the company and together with Rolls-Royce wants to put Tognum in a strong position to to offer a wider range of products, systems and services, the statement said.
Tognum also builds motors for armoured vehicles and boats and posted sales of 2.5 billion euros ($3.5 billion) in 2009, a level it expected to reach again in 2010.
Rolls-Royce will bring its Bergen gas and diesel engine business to the deal along with its "world leading capability in integrated power systems and services," the statement said.
It will also contribute "a well established market presence in the marine, energy and defence sectors."
Daimler meanwhile is well positioned in engine technology and manufacturing expertise and also offers "exceptional access to global markets.
"It is an exciting proposition for Daimler to partner with Rolls-Royce to further invest in the Tognum business," Daimler chairman Dieter Zetsche said in the statement.
Daimler shares showed a gain of 0.66 percent to 49.58 euros in morning trading on the Frankfurt stock exchange while the DAX index was 0.07 percent lower overall.
Tognum was up by 4.11 percent at 24.17 euros, while the MDax index on which it is listed was 0.76 percent higher.
In London, Rolls-Royce was up 2.83 percent at 617.5 pence while the FTSE-100 index was 0.46 percent lower.
© 2011 AFP