Daimler To Sell Its Stake In Rolls-Royce Power Systems
Daimler AG announced it will sell its 50% equity interest in the joint venture Rolls-Royce Power Systems Holding Ltd. (RRPSH), which includes the MTU diesel engine and MTU Onsite Energy businesses, to its joint venture partner Rolls-Royce plc. Financial terms were not immediately disclosed, but Daimler said it expects “a significant cash inflow” as a result of the transaction. According to the procedure agreed upon with Rolls-Royce the financial terms of the transaction will be finally determined in the upcoming months.
Daimler said the acquisition of its shares will allow Rolls-Royce to strengthen RRPS by contributing more of its own activities and technologies. 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 plans to further expand its business with off-highway engines and drive systems.
“This transaction makes economic sense,” said Bodo Uebber, a member of Daimler’s management board responsible for Finance & Controlling and Daimler Financial Services. “Daimler is going to use the proceeds of the transaction to strengthen its core business.”
John Rishton, CEO of Rolls-Royce said: “Rolls-Royce Power Systems has added scale and capability to our reciprocating engines business. It has outstanding technology, operates in long term growth markets and has proved a valuable addition to our Marine and Industrial Power Systems division.”
The transaction is subject to the merger control approvals and foreign-trade law approvals.
Daimler and Rolls-Royce acquired RRPS via a 50-50 joint venture in 2011. The company, based in Friedrichshafen, Germany, was then operating as Tognum AG. Rolls-Royce took over the industrial management of RRPS and has since then consolidated the company.