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Rolls-Royce and Daimler swoop on MTU-parent Tognum

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tognumDaimler and Rolls-Royce say that they plan to launch a public tender offer for 100 per cent of the share capital of Friedrichshaven, Germany, headquartered Tognum AG through a 50:50 joint venture company. The Board of Management of Tognum AG – whose products includes the MTU engine line – says that it welcomes the offer.

“We would create one of the world’s technology leaders in propulsion systems and distributed energy systems,” said Volker Heuer, CEO of Tognum AG. “For us, Daimler and Rolls-Royce would be two financially strong strategic investors, who have made a clear commitment to Tognum’s continued internal and external growth strategy. It would put us in an excellent position to play an active role in shaping the further consolidation of the market.”

Daimler and Rolls-Royce will offer Tognum shareholders €24 per share in cash representing a total consideration of approximately €3.2 billion. This represents a premium of 30 per cent above the XETRA closing price of Tognum shares on Friday, March, 4,  2011, the trading day before the transaction was rumored in the markets, and a premium of around 22 per cent above the weighted average price of Tognum shares over the three months before the announcement of the transaction. Daimler holds a 28.4 per cent stake in Tognum which will be tendered into the takeover offer at the offer price.

Plans are for Rolls-Royce’s Bergen brand engine business to operate within the new joint venture company, which will remain headquartered in Friedrichshafen. It is also envisaged that Rolls-Royce would take over Tognum’s fuel cell business, which the company had already decided to discontinue for commercial reasons.

March 9, 2011

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