TOGNUM: Private equity group EQT is to sell its remaining 22·3% stake in diesel engine manufacturer Tognum AG to Daimler AG. The Daimler board approved the €585m deal on April 30, and it is expected to be completed in the third quarter of this year, subject to regulatory approval.MTU Series 4000 rail diesel engine

Daimler has also acquired a further 1% of the shares in Tognum, and aims to acquire a blocking stake of 25% plus one share.

Tognum is the holding company for MTU and other businesses which were part of the Off-Highway division of DaimlerChrysler (now Daimler) until being sold to EQT for €1bn in 2006 (RG 2.06 p98). Daimler says that at that time the company had 'faced numerous operational challenges', was consolidating on its core business and 'did not want to make the substantial investment required to improve Tognum's competitiveness.'

Tognum subsequently completed a €2·01bn IPO in July 2007. Commenting on the latest deal, Tognum CEO Volker Heuer said 'with Daimler as a strategic anchor investor, the independence of the company that was achieved through the IPO has now been secured long term in the interests of our customers and shareholders.'

Daimler believes that taking over the equity interest from EQT will allow it to 'protect its long-term supply relations with Tognum', particularly in the industrial and agricultural sectors.