Rolls Royce reveals €3bn engine offer

Marion Dakers
ROLLS-ROYCE unveiled its €3.2bn (£2.7bn) plan to team up with car company Daimler to buy industrial engine-maker Tognum yesterday, in what could be one of the FTSE firm’s biggest ever purchases.

Tognum’s shares edged past the €24 per share offer price yesterday, however, when it said it had not yet agreed the deal price with the duo.

Rolls, which first declared its interest on Monday, said the 50:50 bid represented a 30 per cent premium on Tognum’s share price on Friday.

Rolls and Daimler plan to create a joint venture made up of Germany-based Tognum and Bergen, one of Rolls-Royce’s engine businesses.

Daimler already holds a 28.4 per cent stake in Tognum, which makes engines for ships and trains.

The firms said they would keep the existing manufacturing sites and expected the venture to create new jobs.

Tognum chief executive Volker Heuer said: “It would put us in an excellent position to play an active role in shaping the further consolidation of the market.”

The offer is subject to competition clearance and to at least 50 per cent acceptance from investors.

Analysts at RBS Hoare Govett, Rolls Royce’s broker, said in a note:?“The more we’ve thought about the proposed transaction, the more we’ve grown to believe it is a major strategic advance for RR, but at a sensible price and in a quite prudent manner.”

Rolls Royce shares gained 3.2 per cent to close at 619.5p yesterday.