Analyst Views: What does owning the rest of Tognum do for Rolls-Royce?
BEN BOURNE | LIBERUM
The other half of Tognum and Bergen allows Rolls-Royce to progress R&D without any conflicts and brings more balance to the group between gas turbines and reciprocating engines. The technology is complementary and offers exposure to different long term market and investment cycles.
ANDY CHAMBERS | CANTOR FITZGERALD
The acquisition should be modestly accretive as Rolls-Royce generates little income from its cash and [Tognum and Bergen] contributed almost £300m to earnings before interest and tax last year… However, the purchase may reduce speculation about a move for Wartsila.
JONATHAN JACKSON | KILLIK
Rolls-Royce has ample liquidity to fund this purchase from existing cash and borrowing facilities. We believe the market will take this announcement well. The deal will have low integration risk, and will be reasonably priced. It also reduces the chance of a larger acquisition.