Daimler, Rolls-Royce Agree On Price
Daimler AG and Rolls-Royce plc announced that they have agreed on the valuation of Daimler’s 50% equity interest in the joint venture Rolls-Royce Power Systems Holding Ltd. (RRPSH). Both parties have determined the fair market value of Daimler’s shares due to be acquired by Rolls-Royce at a total of €2.43 billion (US$3.35 billion). The transaction is expected to close within this year and is subject to the usual regulatory approvals. Daimler will recognize the financial impact at the time of closing.
This follows the announcement in March that Daimler had decided to end its shareholding in Rolls-Royce Power Systems AG (RRPS).
"We have enjoyed an outstanding working relationship with Daimler and this agreement represents a good outcome for both of our companies,” said John Rishton, CEO of Rolls-Royce. “Rolls-Royce Power Systems has added scale and capability to our reciprocating engines business. It has world class technology, operates in long term growth markets and has proved a valuable addition to our Marine and Industrial Power Systems division."
The acquisition of Daimler’s shares will allow Rolls-Royce to strengthen RRPS by contributing more of its own activities and technologies, the company said. On the basis of long-term supply agreements, Daimler will continue to be an important supplier of heavy-duty and medium-duty diesel engines to RRPS going forward. Furthermore, Daimler said it plans to further expand its business with engines and drive systems for professional applications apart from buses and trucks, particularly in off-highway applications.
“We are pleased to reach an agreement with Rolls-Royce in such a short period of time,” said Dr. Wolfgang Bernhard, Daimler’s board of management member for trucks and buses. “Irrespective of the ownership situation, we will keep connections to RRPS based on our existing supplier relationship. We will also further develop our business for heavy-duty and medium-duty diesel engines in off-highway applications.”