Deutz, Rolls-Royce transaction completed

Deutz and Rolls-Royce’s Power Systems division announced the completion of the transaction for Deutz to take over the sales and service activities for various Daimler Truck industrial engines. The transaction relates specifically to engines with displacements from 5 to 16 L and power output of up to 480 kW (644 hp).

Deutz has “taken the next important step in further expanding our modern internal combustion engine business by taking over the sales and service activities from Rolls-Royce Power Systems,” said Deutz CEO Dr. Sebastian Schultz. (Photo: Deutz)

The transaction sees Deutz take over distribution of the mtu Classic model series and mtu 1000 to 1500 engine series, which are based on three Daimler Truck engine platforms. These engines are used in a range of off-highway applications, primarily in the agricultural and construction equipment sectors.

The servicing activity related to engines already in use is also part of the sale and, following a transition phase, is expected to be covered exclusively by Deutz-authorized partners as of January 1, 2025.

Commenting on closure of the transaction, Dr. Joerg Stratmann, CEO of Rolls-Royce Power Systems, said: “This deal follows the realignment of our strategy to focus on the supply and maintenance of engines and systems primarily from our own production. We are handing over a good business, an excellent customer base and a strong team.”

Rolls-Royce’s Power Systems division will continue to use engines based on Daimler Truck technology to power railway and military land vehicles, as well as for power generation.

The takeover follows on the heels of Deutz’s alliance with Daimler Truck to develop and market medium- and heavy-duty engines (MDEG and HDEP platforms) in the off-highway segment. The alliance was entered into by the two companies in 2023 and is slated to begin in 2028.

“The agreement for Deutz to take over Rolls-Royce’s sales and service activities means we will start marketing the off-highway variants of these engines four years earlier than planned under the existing alliance with Daimler Truck,” said Deutz CTO and CSO Dr. Ing. Markus Müller. “Additionally, we will distribute the older mtu Classic model series (Daimler Truck OM900 and OM460 engine series).

“By accessing the engine platforms at this significantly earlier stage, we can offer our existing and prospective customers a much better concept for the transition,” he continued. “This will give them greater planning certainty, and we will benefit from more rapid access to the market.”

Deutz CEO Dr. Sebastian C. Schulte, described the transaction as “taking the next important step in further expanding our modern internal combustion engine business by taking over the sales and service activities from Rolls-Royce Power Systems.”

“This is an essential building block enabling Deutz to play an active part in the consolidation of the market and represents another milestone in the implementation of our Dual+ strategy,” he added.

Under the strategy, the company is focusing on optimized internal combustion engines, green technologies that meet the needs of the market, such as hydrogen internal combustion engines, and the global expansion of the service business.

The purchase price for the engine portfolio is in the upper-double-digit millions of euros. As a result of the transaction, Deutz anticipates additional annual revenue of around €300 million and an EBIT margin that is above the group’s current margin. 

The transaction’s completion will see more than 50 employees move from the Rolls-Royce division to Deutz.