Daimler-Chrysler
Strategic Concepts & Mechanics
Primary Evidence
"But EQT’s best deal so far, one of the best ever made in Europe according to Conni Jonsson, was German Tognum. It yielded a profit equivalent to more than forty times the invested capital. Tognum built diesel engines, but the previous owner, Daimler-Chrysler, had let the subsidiary idle for a while. EQT made sure to use the expertise available in Tognum to broaden sales. They invested in a new generation of engines, targeted new markets, for example engines for large boats and ships, and thus increased both profit and sales. So how did EQT, a rather young and unknown company, manage to get to the negotiating table? The seller, the newly merged automotive group Daimler-Chrysler, mainly wanted to avoid the business ending up with their worst competitor, the truck manufacturer MAN. The bidder Carlyle was not a suitable buyer either, since Tognum had business with Cuba, a red flag for American companies. Instead, it became the little EQT. But they weren’t completely unknown, after all, Investor was a major shareholder in Daimler’s competitor Scania. It became an important deal not only because it was profitable, but because it marked an entry into the German market. Now, people there knew who the EQT people were when they called and wanted to do business."
"But EQT’s best deal so far, one of the best ever made in Europe according to Conni Jonsson, was German Tognum. It yielded a profit equivalent to more than forty times the invested capital. Tognum built diesel engines, but the previous owner, Daimler-Chrysler, had let the subsidiary idle for a while. EQT made sure to use the expertise available in Tognum to broaden sales. They invested in a new generation of engines, targeted new markets, for example engines for large boats and ships, and thus increased both profit and sales. So how did EQT, a rather young and unknown company, manage to get to the negotiating table? The seller, the newly merged automotive group Daimler-Chrysler, mainly wanted to avoid the business ending up with their worst competitor, the truck manufacturer MAN. The bidder Carlyle was not a suitable buyer either, since Tognum had business with Cuba, a red flag for American companies. Instead, it became the little EQT. But they weren’t completely unknown, after all, Investor was a major shareholder in Daimler’s competitor Scania. It became an important deal not only because it was profitable, but because it marked an entry into the German market. Now, people there knew who the EQT people were when they called and wanted to do business."