Rolls-Royce to launch £2.7bn Tognum bid
Derby-based Rolls-Royce has confirmed its entry into a joint venture to create a new company with Daimler, and confirmed the company’s intention to launch a public tender offer to purchase Tognum AG for €3.2bn (£2.7bn). The company formed between Rolls-Royce and Germany-based Daimler will be a 50:50 venture, and will offer €24 (£20) per share for Tognum shareholders.
Listed on the Frankfurt Stock Exchange, Tognum AG is a supplier of engines, propulsion systems and components for marine, energy, defence and other industrial applications.
The proposed joint venture would comprise Tognum and Bergen, the gas and diesel medium-speed engine business from Rolls-Royce.
The markets in which the joint venture will operate are "attractive and fast growing", especially in the developing economies, said the companies behind the bid.
Sir John Rose, chief executive of Rolls-Royce, said: "This is a significant opportunity to harness the innovation, technology and engineering expertise of Rolls-Royce, Daimler and Tognum. The complementary capabilities we are bringing together will provide us with a world leading proposition, and will enable us to expand the business by developing a broader portfolio of integrated power systems and services for existing and new customers."
Daimler and Rolls-Royce will offer Tognum shareholders €24 per share in cash representing a total consideration of approximately €3.2bn. This represents a premium of 30 per cent above the XETRA closing price of Tognum shares on 4 March 2011.
The offer will be made subject to clearance by appropriate merger control authorities. The joint venture company will also seek to gain the minimum acceptance threshold of at least 50 per cent plus one share.
Dieter Zetsche, chairman of the board of management of Daimler AG, said: "Tognum is an excellent company, and the combination with Daimler and Rolls-Royce creates a win situation for all parties. The planned combination will provide a strong platform to realise the huge market potential.
"It is an exciting proposition for Daimler to partner with Rolls-Royce to further invest in the Tognum business to create growth for the company and create additional value for our shareholders as well as for the customers and employees of Tognum."
