Tognum accepts takeover offer from Daimler and Rolls-Royce

German motor and turbine maker Tognum said Tuesday it would accept an improved offer from the auto group Daimler and Britain's Rolls-Royce, opening the way for a strong alliance.

Tognum accepts takeover offer from Daimler and Rolls-Royce
Photo: DPA

“The management board and supervisory board consider the increased offer price to be appropriate and recommend that shareholders of Tognum accept the tender offer,” a statement said.

Daimler and Rolls-Royce submitted improved terms on Friday, hiking their offer 8.3 percent to €26 per Tognum share.

“Together with Daimler and Rolls-Royce, we are going to create a global technology leader in propulsion systems and decentralised energy systems,” Tognum said.

Daimler already owns 28.4 percent of Tognum, which employs some 8,700 people around the world, and has a long history with the company.

Having owned it for nearly 50 years, Daimler sold Tognum in 2005 to the EQT investment fund for €1.6 billion, only to later buy back around 22 percent in April 2008 for €585 million.

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Environment: Germany aims for carbon-neutral steel by 2050

Germany on Wednesday pledged to help its steel industry become carbon neutral by 2050, as the coronavirus pandemic squeezes a sector already in a prolonged crisis.

Environment: Germany aims for carbon-neutral steel by 2050
Economics Minister Peter Altmaier at the Steel Action Plan conference on Wednesday. Photo: DPA.

It is important to act now so the steel industry “will still be competitive and environmentally friendly … in 30 years' time,” Economy Minister Peter Altmaier said.

A proposed plan includes new criteria for awarding public contracts, a minimum quota of low-carbon or carbon-neutral steel in finished products, and a new “green steel” label, Altmaier said.

Industry figures cited by the economy ministry suggest steelmakers will need an extra €30 billion ($34 billion) to become carbon neutral by 2050.

But the plan unveiled Wednesday did not include any new government subsidies.

Europe's steel industry has been hit hard in recent years by falling prices owing to global overproduction, especially by China, and by US sanctions introduced in 2018.

The coronavirus crisis piled on more pressure with a drop in demand from key sectors such as the auto industry.

German steel production has fallen by 10 percent since 2010 and the number of workers in the sector has dropped by 4,000 to 86,000.

Industrial giant Thyssenkrupp said in May it was looking for a partner for a possible merger of its steel division, after years of troubles including a blocked merger with India's Tata Steel.

As part of its coronavirus recovery plans, Germany unveiled in June a nine-billion-euro scheme to become the world leader in green hydrogen technology.

Berlin is betting that fuel produced from renewable energy sources can both reduce carbon emissions — including in steelmaking – and stimulate the economy.