Off-highway sold off

DaimlerChrysler is to sell its off-highway business unit to financial investor EQT for 1.6 billion Euros.

DaimlerChrysler is to sell its DaimlerChrysler off-highway business unit to financial investor EQT. The transaction includes the sale of MTU Friedrichshafen and the off-highway activities of Detroit Diesel Corporation (DDC).

EQT is a group of private equity funds that manages approximately 6 billion Euros in equity in eight funds. In total, EQT has invested in 39 companies, with combined sales of approximately 16 billion Euros.

DaimlerChrysler and EQT have agreed on a value of 1.6 billion Euros for the businesses. In consideration of cash, cash equivalents, debts and pensions, DaimlerChrysler will benefit from a cash inflow of an estimated 1.0 billion Euros.

The transaction will affect the Group’s operating profit by estimated 0.4 billion Euros, with net income rising by estimated 0.3 billion Euros.

In accordance with the German Foreign Trade and Payments Law, the deal has to be submitted for review by the Federal Economics Ministry. At the same time, it will be investigated by the relevant anti-trust authorities.

Due to these formalities, the close of the sale is not expected to take place until the first quarter of 2006.

DaimlerChrysler is divesting its off-highway activities as a part of the Group’s focus on its core automotive business.