Daimler To Sell Diesel Motor Operation

MUNICH, Germany Dec 27, 2005; Reuters reported that Swedish buyout firm EQT is set to buy DaimlerChrysler's diesel motor unit MTU Friedrichshafen, sources close to the transaction said on today.

"The transaction is set to be announced on Wednesday," one of the sources said.

The sources did not give a price for the deal.

DaimlerChrysler, the world's fifth-biggest carmaker, and EQT declined to comment.

MTU makes engines for ships, locomotives, power plants, heavy vehicles and tanks. It had sales of 1.35 billion euros ($1.6 billion) in 2004.

Media and sources close to the deal have estimated that the sale could fetch DaimlerChrysler more than 1.5 billion euros.

Kohlberg Kravis Roberts and Dubai International Capital had been the early front-runners to buy MTU Friedrichshafen for about 1.7 billion euros.

German truckmaker MAN was also a finalist in the sales process and was the favorite of MTU staff who feared a financial buyer might break up MTU.