Daimler and Rolls confirm £2.7bn bid for Tognum

German automotive group Daimler and aerospace engine manufacturer Rolls-Royce said they would bid 3.2bn euros (£2.7bn) for industrial diesel engine maker Tognum.

Under the deal, first announced on Monday, stockholders can tender their shares for 24 euros each. Tognum shares have jumped by more than a quarter over the past five days.

The agreement is contingent on Daimler and Rolls-Royce gaining control of at least half the equity plus one share.

Daimler will contribute its 28.4 per cent stake into a joint venture that will make the offer to Tognum shareholders.

"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," said Rolls-Royce chief executive John Rose in a statement on Wednesday.

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

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.