MTU Friedrichshafen acquires 100 percent of the gas engine and energy systems provider, MDE

• Strengthen the gas engine business
• Important milestone on the way to growth strategy
• Stronger commitment in a booming market, environmentally-friendly energy systems and combined heat-power systems (KWK)

Friedrichshafen — MTU Friedrichshafen is acquiring MDE Dezentrale Energiesysteme GmbH with effect from January 1, 2006. mtu, which has held one third of the business shares in the Augsburg-based company since early 2002, is getting the remaining two thirds of the MDE business shares from MDE’s main shareholder, Berliner Gesellschaft für Energie Management GmbH. “The full acquisition of MDE sets the foundation for strengthening our gas engine business and is an important milestone on our path of strategic growth”, said Volker Heuer, Chairman of the MTU Friedrichshafen GmbH Management and Chief of the Off-Highway division. “The market for gas engines is growing rapidly, with a trend towards environmentally-friendly, decentral energy facilities that can be operated with biogas as well as natural gas”, explained Heuer.

As a consequence, mtu is intensifying its involvement in this market segment and now completes its strategic investment in MDE begun four years ago.

mtu with MDE: Leading provider of combined heat and electrical power systems

MDE is a leading provider of gas engines and energy systems with an electrical capacity of between 100 and 400 kW electrical power. The company, which was founded in 1977, has 135 employees and a history of three decades of expertise in the development, production and maintenance of efficient gas engines and intelligent solutions for decentral energy supply. Worldwide, the company has sold more than 4,000 gas engines and 2,000 energy modules, the latter also being known as engine-based cogenerators or systems for combined heat and power generation.

Together, mtu and MDE provide energy modules with an electrical power of up to 1,550 kW. Their performance is crowned by the 4000 series 12- to 16 cylinder mtu gas engines used for KWK systems, and recently delivered to Bangladesh, for example, or used to satisfy the strong demand of greenhouses in the Netherlands.

Energy production based on combined power and heat generation is particularly compatible with the environment. The gas engines at such systems not only produce electrical power but also use the waste heat of the engine. This leads to an increase in the energy efficiency of the total module of over 85 percent of the primary energy deployed. Such decentral energy plants are also used in the industrial and communal segments; for example, in hospitals and public indoor swimming pools, in large buildings complexes and in sewage plants, disposal sites and biogas plants. In addition to a good energy output, the fact that, in comparison with conventional power plants, such decentral combined heat and power plants can cause a considerable drop in carbon dioxide emissions during energy generation is also a point in their favour.

Major growth potential through complementary sales networks

mtu’s competitiveness in the gas engine segment and combined heat and power plants will improve considerably through the acquisition of MDE. The joint range of products will become broader, with the added benefit that the sales and service networks complement one another optimally: While MDE maintains a nation-wide network of service branches and sales offices, the global mtu sales network provides access to the major markets in Europe, Asia and North America.

MDE expects revenue of approximately € 32 million in the current financial year, and its current revenue planning assumes a significant increase for 2006. Foreign business is expected to contribute significantly to the revenue growth at MDE.
Overall, the acquisition of MDE Dezentrale Energiesysteme GmbH and the related expansion of the gas engine business is an important first step along mtu’s growth strategy path. The strategy will be driven forward concertedly with the new mtu shareholder, EQT Partners.