DaimlerChrysler, Detroit Diesel Off-Highway Sold
DaimlerChrysler said it has sold its off-highway business unit to the Swedish private equity firm EQT. The deal, long speculated and rumored in the global press, was completed December 28th. The sale, reportedly for €1.6 billion, includes 100 percent of German engine manufacturer MTU Friedrichshafen plus the off-highway portion of Detroit Diesel in the
"The sale process has come to a favorable end for all parties. EQT is our favorite
candidate. With their industrial approach, they substantially contribute to our
company on the financial side, and will work together with us on our growth
strategy", said Volker Heuer, chairman of the MTU Board of Management and the former DaimlerChrysler Off-Highway business unit.
Heuer said current MTU management will apparently be retained and that .
EQT said it will invest in MTU to ensure future growth and market position.
"Growth always requires considerable capital expenditures, and these bear fruit
only after an extended start-up phase", said Marcus Brennecke, managing partner of EQT Germany's operation. "We believe that our investments in the planned new products of MTU are excellently placed. We are well aware that it will take time until we can harvest the fruits of this work." In a presentation to the MTU Works Council, EQT said it planned a significant increase in research and development budgets and investments in the planned 1600 engine series.
"EQT's value creation strategy is based on heavy investments into the growth of
acquired companies," Marcus Brennecke pointed out. "By investing into R&D, new products and add-on acquisitions, we want to make good companies even better and sustainably improve their competitive position. We are highly impressed by MTU's technology leadership which is a strong base to foster the planned growth."
The company will remain a member of the German Employers' Association
and comply with union agreements.
In legal terms, the former DaimlerChysler Off-Highway division is expected to be
transferred to EQT in early 2006. According to Volker Heuer, "the road towards a successful future is open and we will be able to further extend our leading position in technology and innovation with our well established brands, MTU, Detroit Diesel and L'Orange."