Rolls-Royce and Daimler in £2.7bn joint venture

ROLLS-ROYCE and German automotive group Daimler have announced they are to make a £2.7bn joint venture bid for industrial diesel engine manufacturer Tognum.

Listed on the Frankfurt Stock Exchange, Tognum is a premium supplier of engines, propulsion systems and components for Marine, Energy, Defence, and other off-highway applications.

The deal complements both groups as Daimler has strong capabilities in engine technology and manufacturing expertise, with strong access to global markets, while aero-engine maker Rolls-Royce is a global leader in the supply of power plants to the Marine, Energy and Defence sectors.

The markets in which the JV will operate are attractive and fast growing, especially in the developing economies.

The groups involved said by combining their strengths and market access, the JV would offer a “compelling portfolio of products, services and integrated solutions on a global basis”.

John Rose, Rolls-Royce chief executive, said: “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.”

The companies intend to maintain the current manufacturing sites and are confident that the growth strategy will secure jobs, added the JV in a statement.

As part of the deal, Rolls-Royce plans to contribute its Bergen gas and diesel medium-speed engine business used in the marine propulsion and auxiliary power markets.

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