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Daimler AG and Rolls-Royce in €3.2bn Tognum bid


Global motor firms Daimler and Rolls-Royce have announced that they will create a joint venture that would launch a €24-a-share bid aimed at taking over all of Tognum AG, a premium supplier of engines, propulsion systems and components for Marine, Energy, Defence, and other industrial applications. Daimler AG, the global automotive company


and Rolls-Royce Group plc, the global power systems company, intend to launch a public tender offer for 100 per cent of the share capital of Tognum AG. The public tender offer is intended to be carried out by a 50:50 joint venture company. Daimler has strong capabilities in engine


technology and manufacturing expertise, and exceptional access to global markets. Rolls-Royce has world leading capability in integrated power systems and services, and a well-established market presence in the Marine, Energy and Defence sectors. The proposed joint venture, comprising of


Tognum and Bergen, the gas and diesel medium-speed engine business from Rolls-Royce, will offer significant advantages to Daimler, Rolls-Royce and Tognum. The markets in which the Joint Venture will operate are attractive and fast-growing and by combining the strengths and market access of these three world-class companies the Joint Venture will be able to offer a compelling portfolio of products, services and integrated solutions on a global basis. Dr. Dieter Zetsche, Chairman of the Board of


Management, Daimler said: “Tognum is an excellent company, and the combination with Daimler and Rolls-Royce creates a win situation


for all parties. The planned combination will provide a strong platform to realize the huge market potential. It is an exciting proposition for Daimler to partner with Rolls-Royce to further invest in the Tognum business to create growth for the company and create additional value for our shareholders as well as for the customers and employees of Tognum.” Sir John Rose, Chief Executive Rolls-Royce


Group plc said: “This is a significant opportunity to harness the innovation, technology and engineering expertise of Rolls-Royce, Daimler and Tognum. The complementary capabilities we are bringing together will provide us with a world leading proposition, and will enable us to expand the business by developing a broader portfolio of integrated power systems and services for existing and new customers.” Daimler and Rolls-Royce will offer Tognum


Dr. Dieter Zetsche


shareholders € 24 per share in cash representing a total consideration of approximately € 3.2 billion. This represents a premium of around 30 per cent above the XETRA closing price of Tognum shares on Friday March 4, 2011, the last undisturbed trading day before the transaction was rumoured in the markets, and a premium of around 22 per cent above the weighted average price of Tognum shares over the three months before the announcement of the transaction. Daimler holds a 28.4 per cent stake in Tognum which will be tendered into the takeover offer at the offer price.


Daimler AG and Rolls-Royce in €3.2bn Tognum bid


The European Union has granted its approval for Swedish mobile network equipment manufacturer, Ericsson, to acquire the multi -service switch (MSS) business of Ontario -based telecommunications firm, Nortel. The intention of this $65 million deal was revealed


by Ericsson back in September. Nortel has been selling assets to pay back debt holders and is under bankruptcy protection. The EU competition watchdog, The European Commission, said Ericsson and rival Alcatel-Lucent


(ALUA.PA) of France, which uses Nortel switches, had agreed to extend a supply contract between the French company and Nortel to address any competition worries. The Commission said in a statement: “The


proposed transaction would not lead to any competition concerns in the downstream markets for GSM or VoIP network equipment, given the limited market position of Ericsson's competitors who depend on Nortel MSS switches and Ericsson's lack of incentive to engage in such a strategy."


Sir John Rose Emily Williams FINANCIAL


SERVICES SECTOR SEEN AS kEy DRIVER FOR ECONOMIC


GROWTh IN 2011 Oxford Economics study shows 34 per cent of European dealmakers expect to see a growth in the financial services sector deal volumes in 2011 A study of the European


deal-making climate supported by NetJets Europe shows that the financial services sector is expected to feature prominently in deal making activity throughout 2011. The ‘Doing the Deal’ report


examines the views of 100 European deal makers across private equity,


investment


banking, accounting and legal firms in Europe, who collectively were involved in deals worth in excess of $173 billion last year, approximately 10 per cent of global M&A activity in 2011. Of all the sectors identified as areas for growth, the financial services sector was seen by 34 per cent of respondents as a key area for deal making activity in 2011. Outside of this sector, deal makers picked out energy, oil and gas (35 per cent), healthcare (25 per cent), renewables (22 per cent) and commodities (17 per cent) as other sectors expected to see high levels of deal making activity in the next year. Emily Williams, Director at


NetJets Europe, said: “Despite recent turbulent times, the financial services industry remains a strong barometer for economic health – both globally and also for NetJets Europe. The fact that our recent flight volumes to the World Economic Forum in Davos were over 16 per cent higher than last year suggest economic confidence is returning and the financial services sector is going to have a key role in driving this growth.” Underlining the longer-term


confidence in the sector, the financial services sector was also seen by the 25 per cent of respondents to be increasingly active over the next five years. This was considerably more than the other sectors picked out by respondents, with only healthcare (26 per cent) and the energy, oil and gas sector (32 per cent) coming close to this level of activity over a five year term.


fi MONTHLY MARCH 2011


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