Germany's Deutz to buy military vehicle maker FFG for €1.6 billion
Deutz's Strategic Acquisition of FFG
By Emanuele Berro
Deal Overview and Financial Details
July 9 (Reuters) - German engine manufacturer Deutz has agreed to acquire military vehicle maker FFG Flensburger Fahrzeugbau Gesellschaft for €1.6 billion ($1.83 billion), to be paid partly in cash and partly through newly issued Deutz shares, it said on Thursday.
Shareholder Changes Post-Acquisition
After completion of the transaction, expected no later than 2027, the families that currently own FFG will become major shareholders of Deutz, with a stake of up to 29.9%, the engine maker said in a statement.
Market Reaction
Shares in Deutz were up around 4% by 0729 GMT, having earlier risen by as much as 10.2%.
About FFG and Its Role in Defense
FFG's Product Portfolio
FFG, based in Flensburg in northern Germany, manufactures military support and armoured vehicles, including the WiSENT armoured recovery vehicle and ACSV G5 tracked combat-support vehicle used by NATO customers.
Integration into Deutz's Defense Unit
The vehicle maker will form the new core of Deutz's Defense business unit, while remaining operationally independent, Deutz added.
Strategic Rationale and Future Outlook
Expansion into the Defense Sector
The acquisition is part of Deutz's push into the rapidly expanding defence sector, as German industry seeks to capitalise on rising European defence spending.
Financial Targets and Projections
Revenue and Margin Goals
The company said the transaction is expected to bring its 2030 strategic targets of €4 billion in revenue and a 10% margin on earnings before interest and tax within reach ahead of schedule.
($1 = 0.8744 euros)
(Reporting by Emanuele Berro; Editing by Linda Pasquini and Jan Harvey)
