Daimler to sell 50% stake in engines JV to partner Rolls-Royce holdings
STUTTGART (Bloomberg) -- Daimler will sell its 50 percent stake in an engines joint venture to partner Rolls-Royce Holdings Plc. to invest in its automotive and truck businesses.
Daimler is selling the Rolls-Royce Power Systems holding under a put option agreed with the UK manufacturer in 2011 when the venture was established, the German company said in a statement.
The stake was valued at 1.9 billion pounds ($3.2 billion) on Rolls-Royce's balance sheet as of Dec. 31. Final terms will be determined later.
Daimler and Rolls-Royce made a joint 3.4 billion euro ($4.72 billion) bid for German engine maker Tognum in 2011. The Friedrichshafen-based company manufactures high-speed diesel engines for the marine, energy and defense industries. As part of the deal, London-based Rolls-Royce contributed its Bergen engine business to the venture.
Investing in Mercedes-Benz
Daimler CEO Dieter Zetsche, who has a goal for the company’s Mercedes-Benz brand to surpass rivals Audi and BMW to become the world's biggest maker of premium cars by 2020, is rolling out 30 new vehicles by the end of the decade, a dozen of which will have no predecessor.
"Daimler needs to invest in new technologies in the auto segments," said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. "They need the money there more urgently than for a more peripheral business."
Daimler will continue supplying medium- and heavy-duty diesel engines to the venture under supply agreements that run until 2025. The automaker delivers about 18,000 engines a year to the company, which is already consolidated in Rolls-Royce's books.Contact Automotive News