Rolls-Royce, Daimler Price Power Systems JV Stake at EUR2.43 Billion

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 [e-mail]

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