Daimler, Rolls-Royce to win EU okay for Tognum: source

Daimler, Rolls-Royce to win EU okay for Tognum: source

Brussels: Daimler and Rolls-Royce are set to gain unconditional EU approval to buy Tognum in a bid valuing the German engine maker at €3.4 billion ($4.83 billion), a source said on Wednesday.

The bidders are seeking to tap into the higher margin industrial diesel engine sector, where the global market is estimated to be worth more than €30 billion a year.

The European Commission is expected to approve the deal in the coming days, said the source, who declined to be identified because of the sensitivity of the matter.

The EU executive had set a 25 July deadline for its decision.

Daimler shares were trading 0.9% lower at €51.90 by 1500 GMT, Rolls-Royce 2.1% higher at 649.25 pence and Tognum 1.3% up at €26.35 The Stoxx 600 auto index was 0.7% lower.

Daimler and Rolls-Royce won 94% of shares in Tognum last month after raising their offer for the company.

Tognum, owned by Daimler until it sold the unit in 2005, makes diesel and gas turbine engines for armoured vehicles and tanks, generators, cranes, trains and ships.