Daimler AG and Rolls-Royce Group Plc now have a 60 percent share in Tognum AG, after their tender offer expired for the manufacturer of industrial diesel engines. Rolls-Royce and Daimler disclosed the stake resulted to a strong foundation for the alliance of the three companies.
Daimler already has 28.4 percent share of Tognum. Daimler and Rolls-Royce had offered 26 euros per share for Tognum, which values the diesel engine manufacturer at 3.4 billion euros ($4.9 billion).
The two companies succeeded in their takeover last May after they raised their offer by 8.3 percent to 26 euros a share and gained the support of Tognum’s board, which concurred to tender their 5 percent share, combined.
With the 28.4 percent share that Daimler has, a deal was made possible at the reduced acceptance threshold of 30 percent without the support of other shareholders of Tognum.
When the takeover is completed, Daimler will reconnect with a major purchaser of its truck diesel engines that are retooled by Tognum for specialized uses.
On the other hand, Rolls Royce will expand its marine and diesel power business. The two companies intend to tap into an international market that is worth at least 30 billion euros a year.
Tognum is ranked right behind Caterpillar Inc., which is the world’s largest manufacturer of high-speed diesel engines for the defense, marine and energy industries. Daimler used to own all of Tognum, which was call MTU Friedrichshafen at that time.
The company sold Tognum for 1.6 billion euros to EQT Partners, a Stockholm-based private equity firm, in March 2006 to help pay for the reorganization of U.S. automaker Chrysler, which it still owned at that time.