FRANKFURT: German automaker Daimler and Britain's Rolls-Royce announced Wednesday plans to take over Tognum, a German maker of motors and turbines they want to make into a world leader.
Daimler and Rolls-Royce "intend to launch a public tender offer for 100 percent of the share capital of Tognum," they said, valuing Tognum at about 3.2 billion euros ($4.45 billion).
Tognum said in a statement however that "for now, no agreement on the purchase price has been reached."
Daimler and Rolls-Royce said they would create a 50:50 joint venture to make the bid, offering 24 euros for each Tognum share, and work to make the new entity "a world leading engine systems company."
The offer price represents a premium of 30 percent compared with Tognum's share price on Friday before rumours of the bid began to circulate, a joint statement said.
Daimler chairman Dieter Zetsche told a conference call that the bid was a "friendly" one, and added: "We are convinced it is an attractive offer for shareholders" in which "all three parties will win."
The new venture "will be able to offer a compelling portfolio of products, services and integrated solutions" in what is known as the "off-highway" sector of marine, energy, defence and industrial applications, the statement said.
Daimler and Rolls-Royce are also mulling "investment in a new state of the art plant and facilities to enable growth and deliver productivity improvements."
Tognum is based in Friedrichshafen, southern Germany, and its headquarters would remain there with no reduction in jobs.
Daimler already owns 28 percent of Tognum and together with Rolls-Royce wants to put it in a position to offer a wider range of products, systems and services, their joint statement said.
Tognum also builds motors for armoured vehicles and boats and posted sales of 2.5 billion euros ($3.5 billion) in 2009, a level it expected to reach again in 2010.
It employs 8,700 people worldwide.
Rolls-Royce will bring its Bergen gas and diesel engine business to the deal along with expertise in integrated power systems and services.
It will also contribute "a well established market presence in the marine, energy and defence sectors."
Daimler, the leading manufacturer of heavy trucks worldwide, is well positioned in engine technology and manufacturing expertise and offers "exceptional access to global markets.
"It is an exciting proposition for Daimler to partner with Rolls-Royce," Zetsche said in the statement.
Daimler shares showed a gain of 1.66 percent to 50.07 euros in midday trading on the Frankfurt stock exchange while the DAX index was 0.12 percent higher overall.
Tognum was up by 7.93 percent at 25.05 euros, while the MDax index on which it is listed was 1.22 percent higher.
In London, Rolls-Royce was up 2.50 percent at 615.5 pence while the FTSE-100 index was 0.33 percent lower.
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