Rolls-Royce Holdings Plc will pay EUR2.43 billion ($3.36 billion) to acquire the 50-percent stake held by joint venture partner Daimler AG at Rolls-Royce Power Systems. The carmakers target to complete the transaction within the next five months. The carmakers announced that the amount was the fair market value for the stake.
In March, Daimler said it intends to sell its stake in the joint venture under a put option agreed with the Rolls-Royce three years ago. Daimler and Rolls-Royce made a joint EUR3.4 billion bid for the engine maker in 2011. As part of the agreement, Rolls-Royce contributed its Bergen engine operations to the joint venture.
Wolfgang Bernhard, head of Daimler's commercial-vehicles division, said in the statement that they are pleased to ink a deal with Rolls-Royce in such a short period of time.
Daimler chief executive Dieter Zetsche intends to use the proceeds from the sale to further invest in Mercedes-Benz's expansion, which is key to his goal for the luxury brand to top Audi and BMW to become the world's best-selling luxury carmaker by the end of the decade.
Zetsche is planning to launch 30 new vehicles by 2020, a dozen of which will have no predecessor. Despite the stake sale, Daimler will still supply medium- and heavy-duty diesel engines to Rolls-Royce Power Systems under supply agreements that will expire in 2025. Daimler supplies around 18,000 engines annually to Rolls-Royce Power Systems, which is already consolidated in Rolls-Royce's books.