By Ian Walker
LONDON-- Rolls-Royce Holdings PLC and Daimler AG have valued the
German auto maker's 50% interest in their joint venture,
Rolls-Royce Power Systems, at 2.43 billion euros ($3.36
billion).
The transaction is expected to complete within the next five
months and is subject to the usual regulatory approvals, the
British engines maker said Wednesday.
In March, Daimler announced plans to sell its stake in the
venture to Rolls-Royce, with the proceeds of the transaction being
used to strengthen its core business.
Daimler and Rolls-Royce acquired the unit via a 50:50 joint
venture in 2011.
"We have enjoyed an outstanding working relationship with
Daimler and this agreement represents a good outcome for both of
our companies,", said Rolls-Royce Chief Executive John Rishton.
Daimler board member Wolfgang Bernhard said: "Irrespective of
the ownership situation, we will keep connections to RRPS
[Rolls-Royce Power Systems] based on our existing supplier
relationship."
The move comes after Rolls-Royce's failed attempt to take over
smaller Finnish rival Wartsila Oyj, a specialist maker of diesel
engines for midsize ships, in a multibillion-dollar deal. Marine
equipment accounts for about 17% of engine maker Rolls-Royce's
revenue, while engines for commercial aircraft account for the
lion's share, at 43%.
In midmorning trading in Europe, Rolls-Royce shares were up 3
pence, or 0.3 %, at 1012 pence in an overall higher FTSE 100
Index--up 0.46%.
Monica Houston-Waesch in Frankfurt contributed to this
article.
Write to Ian Walker at ian.walker@wsj.com
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