Rolls-Royce and Daimler, through their 50:50 joint venture, have agreed to take over the German engine manufacturer Tognum in a deal worth €3.4 billion.
The two companies first bid for Tognum in early March, offering €24 per share; however it wasn’t until they raised their offer to €26 per share that they secured the backing of Tognum’s board.
Friedrichshafen, Germany-based Tognum is the world’s second-biggest manufacturer of high-speed diesel engines for the defence, marine and energy sectors.
In a statement, Rolls Royce said that combining the strengths, technology and market access of the three companies would result in an “unrivalled” portfolio of products, services and integrated solutions. It said the deal would enable the joint venture to become a world-leading industrial engine systems and solutions company.
The companies have pledged to maintain Tognum’s existing manufacturing sites.
Commenting on the deal, Andrew Shilston, finance director for Rolls-Royce, said: “The joint venture will combine the innovation, technology and engineering expertise of three world class companies to accelerate growth and to create a world leader in this important market. Tognum’s management has supported the industrial logic of this proposal from the outset and we are pleased that we have now reached an agreement that will take us forward.”
Bodo Uebber, chief financial officer at Daimler, added: “Today’s agreement is a milestone in Tognum’s history. With this reasonable increase of our offer, we have reached out to the management and all other shareholders of Tognum. This underlines our commitment to pursue a forward looking and long term strategy that keeps in mind the best interest of all parties involved. We welcome Tognum’s pledge to support the offer.”
Tognum has agreed to pledge five per cent of company stock to the deal. With Daimler already holding a 28.4 per cent stake in Tognum, the companies’ total stake will thus cross the 30 per cent acceptance threshold for the bid.
