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Daimler and Rolls-Royce agree on valuation of Daimler’s equity interest in Rolls-Royce Power Systems

Total fair market value of Daimler’s equity interest in Rolls-Royce Power Systems (RRPS) determined at EUR 2.43 billion Daimler plans to invest the proceeds in the expansion of its core business Daimler will further develop its business with diesel engines and continue the close cooperation with Rolls-Royce and RRPS Daimler AG (ticker symbol DAI) and … Continued

  • Total fair market value of Daimler’s equity interest in Rolls-Royce Power Systems (RRPS) determined at EUR 2.43 billion
  • Daimler plans to invest the proceeds in the expansion of its core business
  • Daimler will further develop its business with diesel engines and continue the close cooperation with Rolls-Royce and RRPS

Daimler AG (ticker symbol DAI) and Rolls-Royce plc today announce that they have agreed on the valuation of Daimler’s 50-percent equity interest in the joint venture Rolls-Royce Power Systems Holding Ltd. (RRPSH). Both parties have determined the fair market value of Daimler’s shares due to be acquired by Rolls-Royce at a total of EUR 2.43 billion. The transaction is expected to close within this year and is subject to the usual regulatory approvals. Daimler will recognize the financial impact at the time of closing.

This follows the announcement on March 7, 2014 that the Board of Management of Daimler AG has decided to exercise the put option relating to its shareholding in Rolls-Royce Power Systems AG (RRPS). Rolls-Royce is the best conceivable owner for RRPS. The acquisition of Daimler’s shares will allow Rolls-Royce to strengthen RRPS by contributing more of its own activities and technologies. On the basis of long-term supply agreements, Daimler will continue to be an important supplier of heavy-duty and medium-duty diesel engines to RRPS going forward. Furthermore, Daimler plans to further expand its business with engines and drive systems for professional applications apart from buses and trucks (“off-highway”).

John Rishton, CEO of Rolls-Royce said: “We have enjoyed an outstanding working relationship with Daimler and this agreement represents a good outcome for both of our companies. Rolls-Royce Power Systems has added scale and capability to our reciprocating engines business. It has world class technology, operates in long term growth markets and has proved a valuable addition to our Marine and Industrial Power Systems division.”

Dr. Wolfgang Bernhard, Daimler’s Board of Management Member for trucks and buses, added: “We are pleased to reach an agreement with Rolls-Royce in such a short period of time. This underlines the profound partnership established during the past years. Irrespective of the ownership situation, we will keep connections to RRPS based on our existing supplier relationship. We will also further develop our business for heavy-duty and medium-duty diesel engines in off-highway applications.”

Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services: “Both parties have agreed on a fair valuation. We are convinced that both strategically as well as economically this is the best solution going forward for all partners involved. Daimler is going to use the proceeds of this transaction to strengthen its core business.”

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