30 April 2008

Daimler is spending €585 million to buy a 22.3 per cent stake in the Tognum off-highway engines producer. It is buying the stake held by EQT and is looking for a further stake of 1 per cent from other shareholders.

 

The move marks Daimler's return to the off-highway business. Tognum, which includes brands such as MTU, was sold off to the EQT private equity consortium two years ago, when the then DaimlerChrysler floated it off.

 

At that stage, Daimler wanted to raise money for its transatlantic car businesses and did not want to make the investment that the Tognum businesses were demanding. Now that Daimler no longer has the burden of its US partner, it is reassembling parts of its former business that it was forced to hive off.

 

Despite selling Tognum, Daimler continued to be a big supplier of engines to it and to receive driveshafts back from the group.

 

Daimler says it now intends to take a blocking minority stake in Tognum and will appoint two board members. The EQT private equity group floated Tognum on the Frankfurt stockmarket last July, but retained a 22.3 per cent stake for itself which it has now sold.