Daimler AG and Rolls-Royce Group plc joint venture welcomes Tognum’s endorsement of its revised offer

Monday, 16 May 2011

  • Offer price will be increased by € 2 to € 26 per share; acceptance period will be extended to June 1, 2011.
  • Tognum welcomes the increased offer; board members agree to tender their shares subject to legal formalities.
  • Increased and final offer is the best option for all stakeholders.
  • Cornerstone paper, which offers assurances on continued employment and investment, maintained.
  • Combination of Daimler, Rolls-Royce and Tognum will create a global industry leader.
  • Acceptance threshold will be lowered to 30 per cent.

Stuttgart / London / Friedrichshafen – Daimler AG and Rolls-Royce Group plc, through their 50:50 joint venture, are pleased to have reached an agreement with Tognum AG concerning their voluntary public takeover offer for all Tognum shares. The offer price for Tognum will be increased by € 2 to € 26 per share. In addition, the acceptance threshold for the bid will be reduced to 30 per cent, from the 50 per cent plus one share originally stated in the offer document. These adjustments re-affirm the strong commitment by both Rolls-Royce and Daimler to a long-term collaboration with Tognum. Due to the change of the offer, and in accordance with German takeover laws, the acceptance period will automatically be extended by two weeks to June 1, 2011. These changes to the offer document will be formally effected tomorrow by publication on www.engineholding-angebot.de as well as in the Electronic Federal Gazette.

Tognum´s Executive Board and the Supervisory Board welcome the increased offer and all members of the Executive Board and the Supervisory Board holding Tognum shares declared that they will tender their shares into the offer. This is subject to a confirmation of the support in a supplementary statement pursuant to section 27 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG), which will be published in due course after the publication of the amended offer.

The partners are all convinced that this transaction presents the most compelling option for Tognum and is in the best interest of all of its stakeholders. Combining the strengths, technology and market access of these three world-class companies, the joint venture will be able to offer an unrivalled portfolio of products, services and integrated solutions globally, thus enabling the joint venture to become a world leading industrial engine systems and solutions company.
As part of the transaction, the partners intend to maintain the current manufacturing sites and are confident that the growth strategy will secure jobs and lead to further opportunities. The cornerstone paper, which offers assurances on continued employment and investment, will be maintained.

Bodo Uebber, Chief Financial Officer and Member of the Board of Management of Daimler said: “Today’s agreement is a milestone in Tognum’s history. With this reasonable increase of our offer, we have reached out to the management and all other shareholders of Tognum. This underlines our commitment to pursue a forward looking and long term strategy that keeps in mind the best interest of all parties involved. We welcome Tognum’s pledge to support the offer.”

Andrew Shilston, Finance Director, Rolls-Royce Group plc, said: “The joint venture will combine the innovation, technology and engineering expertise of three world class companies to accelerate growth and to create a world leader in this important market. Tognum’s management has supported the industrial logic of this proposal from the outset and we are pleased that we have now reached an agreement that will take us forward.”

Safe Harbour Statement

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Tognum AG shares. The final terms and further provisions regarding the public offer will be disclosed in the offer document after the publication has been approved by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin). The final terms of the public offer may differ from the basic information described herein. Investors and holders of Tognum AG shares are strongly recommended to read any such offer document and all documents in connection with the public offer as they are published, since they will contain important information.

Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction. The figures in this document are preliminary and have neither been approved yet by the Supervisory Board nor audited by the external auditor. This document contains forward-looking statements that reflect our current views about future events. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a deterioration of our funding possibilities on the credit and financial markets; changes in currency exchange rates; a shift in consumer preference; or a possible lack of acceptance of our products or services, which may limit our ability to implement prices as well as to adequately utilize our production capacities; price increases in fuel, raw materials; disruption of production due to shortages of materials, labour strikes, or supplier insolvencies; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook of companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures, changes in laws, regulations and government policies and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties. If any of these risks and uncertainties materialize, or if the assumptions underlying any of our forward-looking statements prove incorrect, then our actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made.

The takeover offer will be implemented in the United States pursuant to Section 14(e) and Regulation 14E of the U.S. Securities Exchange Act of 1934, as amended, and otherwise in accordance with the provisions of the WpÜG. Accordingly, the takeover offer is subject to publication and other procedural requirements, including with regard to withdrawal rights, offer period, settlement procedures and timing of payments, which may differ from those regarding the implementation of public offers in the United States. Moreover, Tognum shareholders who come into possession of the offer document outside the Federal Republic of Germany or the United States and wish to accept the offer outside the Federal Republic of Germany and the United States may be subject to other legal provisions than those of the Federal Republic of Germany and the United States; these shareholders are advised to inform themselves of the relevant applicable legal provisions and to comply with them. Daimler, Rolls-Royce and the joint venture assume no responsibility for acceptance of the offer outside the Federal Republic of Germany and the United States being permissible under the relevant applicable legal provisions.

About Rolls-Royce

Rolls-Royce is a world-leading provider of power systems and services for use on land, at sea and in the air, and has established a strong position in global markets - civil aerospace, defence aerospace, marine and energy.

Rolls-Royce has a broad customer base comprising more than 500 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces, more than 2,500 marine customers, including 70 navies, and energy customers in nearly 120 countries, with an installed base of 54,000 gas turbines.

Rolls-Royce is a world leader in marine solutions, providing products, service and expertise to more than 30,000 vessels in the offshore, merchant, naval surface and submarine markets. It designs ships and its product range includes power and propulsion systems featuring diesel engines and gas turbines, propellers, thrusters and water jets. Rolls-Royce also provides manoeuvring and stabilising systems and deck machinery.

Annual underlying revenues were over £10.8 billion in 2010, of which more than half came from the provision of services. The firm and announced order book stood at £59.2 billion at 31 December 2010, providing visibility of future levels of activity.

Rolls-Royce employs 39,000 skilled people in offices, manufacturing and service facilities in over 50 countries.  Over 11,000 of these employees are engineers.

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