Daimler’s equity interest in Rolls-Royce Power Systems valued at EUR 2.43 billion
Daimler AG and Rolls-Royce plc today announceed their agreement to the valuation of Daimler’s 50% equity interest in the Rolls-Royce Power Systems Holding Ltd JV. The fair market value of Daimler’s shares due to be acquired by Rolls-Royce are valued at EUR 2.43 billion. With a transaction expected this year, the matter is subject to usual regulatory approvals and Daimler will recognize the financial impact at the time of closing.
Daimler AG Board of Management made an announcement regarding using the put option relating to its shareholding in Rolls-Royce Power Systems AG (RRPS) on 7th March, 2014. Acquisition of Daimler’s shares allows Rolls-Royce to strengthen RRPS by contributing more of its own activities and technologies. Daimler continues to be an important supplier of heavy-duty and medium-duty diesel engines to RRPS going forward. Daimler plans to expand its engines and drive systems business for professional applications apart from buses and trucks (“off-highway”).
John Rishton, CEO of Rolls-Royce said: “We have enjoyed an outstanding working relationship with Daimler and this agreement represents a good outcome for both of our companies. Rolls-Royce Power Systems has added scale and capability to our reciprocating engines business. It has world class technology, operates in long term growth markets and has proved a valuable addition to our Marine and Industrial Power Systems division.”
Dr. Wolfgang Bernhard, Daimler’s Board of Management Member for trucks and buses, added: “We are pleased to reach an agreement with Rolls-Royce in such a short period of time. This underlines the profound partnership established during the past years. Irrespective of the ownership situation, we will keep connections to RRPS based on our existing supplier relationship. We will also further develop our business for heavy-duty and medium-duty diesel engines in off-highway applications.”
Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services: “Both parties have agreed on a fair valuation. We are convinced that both strategically as well as economically this is the best solution going forward for all partners involved. Daimler is going to use the proceeds of this transaction to strengthen its core business.”