Rolls-Royce reaches agreement-in-principle with Deutz AG to take over the lower-power-range engines business

Posted on December 13, 2023

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Rolls-Royce and Deutz  AG are in positive discussions for the sale of the off-highway engines business in the lower power range up to 480  kW to Deutz  AG for a price in the high double-digit million Euros. This relates to diesel engines and engine systems using Daimler technology which are developed and manufactured by Daimler  Truck  AG for Rolls-Royce  Power  Systems to its specifications and used mainly in agricultural vehicles and construction machinery, not in rolling stock or in military vehicles.

Rolls-Royce recently presented its strategy to become a high performing, competitive, resilient and growing business to investors. In the Power Systems division the focus will be on the strategic growth areas of power generation, governmental, marine, service and the future field of battery energy storage systems.

Tufan Erginbilgic, CEO, Rolls-Royce plc, said: “This is a clear illustration of our strategy in action. Becoming more focused on the markets where we know Rolls-Royce can win. Power Systems is an integral part of our organisation with a strong brand and real advantage in power generation, governmental and marine end-markets, where we see the strongest demand and an opportunity for better returns from our power-dense and reliable solutions.”

Dr.  Jörg  Stratmann, CEO of Rolls-Royce's Power  Systems, said: “As we evolve our strategy, we are also constantly analysing our product portfolio. As a result, we will be concentrating largely on higher-powered systems in the off-highway engine sector, primarily from our in-house production. We have therefore decided to transfer our successful lower-power-range engines business, which uses Daimler technology, to a partner.”

Until the transfer of the business is complete, Rolls-Royce's Power  Systems division will continue its activities in this business segment unchanged in such a way that customer relationships, delivery and service obligations remain unaffected. Following a final agreement, the closing – subject to regulatory approvals – is expected from mid-2024.

Rolls-Royce Power Systems currently has exclusive rights to the global distribution of off-highway engines using Daimler technology (MDEG, HDEP and Classic engine platforms), with the original contract term set to expire in April  2028.

The products under negotiation are the Series  1000, 1100, 1300 and 1500 engines and the Classic Series  OM900 and OM460 in the 75 to 480  kW power range, albeit specifically not those used in rail or military vehicle applications. The total number of people employed in this part of the business is in double-digit figures.

About Rolls-Royce Holdings plc

  1. Rolls-Royce develops and delivers complex power and propulsion solutions for safety-critical applications in the air, at sea and on land. Our products and service packages enable our customers to connect people, societies, cultures and economies together; they meet the growing need for power generation across multiple industries; and enable governments to equip their armed forces with the power to protect.
  2. Rolls-Royce has a presence in 48 countries and customers in more than 150, comprising over 250 commercial large aero engine customers, 160 armed forces and navies and approximately 40,000 active Power Systems customers. We are committed to becoming a net zero company by 2050 and we support our customers to do the same.
  3. Annual underlying revenue was £15.4bn in 2023, underlying operating profit was £1.6bn and free cash flow £1.3bn.  
  4. Rolls-Royce Holdings plc is publicly traded company (LSE: RR., ADR: RYCEY, LEI: 213800EC7997ZBLZJH69).
  5. Rolls-Royce Power Systems is headquartered in Friedrichshafen in southern Germany and employs more than 10,500 people. The product portfolio includes mtu-brand high-speed engines and propulsion systems for ships, heavy land, rail and defence vehicles and for the oil and gas industry. The portfolio also includes diesel and gas systems and battery containers for mission critical, standby and continuous power, combined generation of heat and power, and microgrids. With its climate friendly technologies, Rolls-Royce Power Systems is helping to drive the energy transition.


Martin Wielgus Vice President Brand, Marketing & Communications
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