Daimler and Rolls-Royce announced on March 9 plans to take over Tognum, a German maker of motors and turbines. The companies "intend to launch a public tender offer for 100% of the share capital of Tognum," valuing Tognum at about 3.2 billion euros ($4.45 billion). The offer price represents a premium of 30% compared with Tognum's share price on March 4 before rumors of the bid began to circulate. Tognum said however that "for now, no agreement on the purchase price has been reached."
Daimler already owns 28% of Tognum and together with Rolls-Royce wants to put it in a position to offer a wider range of products, systems and services. Daimler and Rolls-Royce said they would create a 50:50 joint venture to make the bid, offering 24 euros for each Tognum share, and work to make the new entity "a world leading engine systems company."
Daimler chairman Dieter Zetsche told a conference call that the bid was a "friendly.".The new 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, defense and industrial applications, the statement said.
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 its headquarters would remain there with no reduction in jobs.
Tognum also builds motors for armored vehicles and boats and posted sales of 2.5 billion euros (US$3.5 billion) in 2009, a level it expected to reach again in 2010. It employs 8,700 people worldwide.
Rolls-Royce will bring its Bergen gas and diesel engine business to the deal along with expertise in integrated power systems and services. It will also contribute "a well established market presence in the marine, energy and defense sectors."
Daimler, the leading manufacturer of heavy trucks worldwide, is well positioned in engine technology and manufacturing expertise and offers exceptional access to global markets. "It is an exciting proposition for Daimler to partner with Rolls-Royce," Zetsche said.
Copyright Agence France-Presse, 2011
