Rolls-Royce investors hail Tognum takeover
ROLLS-ROYCE shares led the FTSE 100 yesterday as the market cheered Friday’s news that the engineering giant is buying the rest of Tognum.
Rolls-Royce, which bought the German engine maker in a 50-50 venture with Daimler three years ago, is spending an estimated £1.9bn to buy out its partner.
“The using of cash and borrowing facilities to pay for this clearly means that the related interest charge is modest and therefore the enhancement to Rolls-Royce’s earnings is probably five or six per cent and a useful little fillip,” said Jefferies analyst Sandy Morris.
“Having full control over a business that has significant potential synergies with other part of Rolls-Royce gives you a free hand and that has got to be good.” Shares in Rolls-Royce rose 1.6 per cent, beating an overall fall in the FTSE 100.