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A three-year-old joint-venture between Daimler AG and Rolls-Royce is about to be dissolved in the next few months, with the German car giant selling its 50-percent equity interest to its partner.
Born in 2011, but with a much longer history under its belt and previously called Tognum, the Rolls Royce Power Systems (RRPS) joint-venture is registered in Friedrichshafen, Germany, and is a specialist in large high-speed engines and propulsion systems for heavy land, rail and defense vehicle (such as tanks) and for the oil and gas industry.
Even though Roll-Royce said that they have enough liquidity to take the full ownership of the company, the deal will be finalized within the next six months using both cash and some borrowing from the British side.
“With its globally leading expertise in the area of industrial propulsion systems, Rolls-Royce is the best conceivable owner for RRPS. Irrespective of the ownership situation, we will remain closely connected with the company based on our supply relationship. In close coordination with Rolls-Royce, we will further drive the business for heavy-duty and medium-duty diesel engines.” said Dr. Wolfgang Bernhard, Daimler’s Board of Management Member for trucks and buses.
Despite the sale of its 50-percent stake in the company, Daimler AG will continue to supply Rolls-Royce Power Systems with heavy-duty and medium-duty diesel engines un til 2025, as part of their supply relationship that will not be affected by the join-venture split.
The transaction between the two companies is obviously subject to merger control approvals and foreign-trade law approvals. After the transaction begins, the Germans are expecting a significant cash inflow, with the money received “to be used in strengthening Daimler's core business,” according to Bodo Uebber, Member of the Board of Management of Daimler AG for Finance and Controlling and Daimler Financial Services.
Even though Roll-Royce said that they have enough liquidity to take the full ownership of the company, the deal will be finalized within the next six months using both cash and some borrowing from the British side.
“With its globally leading expertise in the area of industrial propulsion systems, Rolls-Royce is the best conceivable owner for RRPS. Irrespective of the ownership situation, we will remain closely connected with the company based on our supply relationship. In close coordination with Rolls-Royce, we will further drive the business for heavy-duty and medium-duty diesel engines.” said Dr. Wolfgang Bernhard, Daimler’s Board of Management Member for trucks and buses.
Despite the sale of its 50-percent stake in the company, Daimler AG will continue to supply Rolls-Royce Power Systems with heavy-duty and medium-duty diesel engines un til 2025, as part of their supply relationship that will not be affected by the join-venture split.
The transaction between the two companies is obviously subject to merger control approvals and foreign-trade law approvals. After the transaction begins, the Germans are expecting a significant cash inflow, with the money received “to be used in strengthening Daimler's core business,” according to Bodo Uebber, Member of the Board of Management of Daimler AG for Finance and Controlling and Daimler Financial Services.
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