Deutz AG has signed an agreement to sell its gas engines and diesel engines business for decentralized power generation to 3i, a European private equity and venture capital firm, for €360 million (about U.S.$496 million). The transaction is expected to close by the end of the third quarter, subject to approval by the supervisory board of Deutz AG and antitrust authorities.
The overlap between Deutz Power Systems and the compact engines business of Deutz AG is limited as business processes, customer demands and market characteristics differ. “Following a detailed strategic review, the management board and supervisory board have concluded that we cannot exploit the full potential of the compact engines businesses as well as the medium and large stationary gas engines business in parallel,” said Deutz AG CEO Gordon Riske. “However, both businesses have great prospects for further profitable growth.”
3i plans to work together with the company’s management to continue its present growth strategy, 3i officials said.