Penske to acquire MTU-DDA

Penske Automotive Group has announced it will acquire MTU Detroit Diesel Australia, the deal to be closed by the end of 2014

US auto industry giant Roger Penske is strengthening his push into the Australia/Pacific truck market, with the billionaire and racing legend announcing this morning that Penske Automotive Group has signed an agreement to acquire power systems distributor MTU Detroit Diesel Australia from Daimler AG and MTU Friedrichshafen.

MTU-DDA distributes a wide variety of diesel and gas engines and power systems throughout Australia, New Zealand and the Pacific, and Roger Penske says its acquisition – to be finalised before the end of this year – will add further momentum to his company's operations in the region.

Roger Penske's Australian-based firm, Penske Commercial Vehicles, was formed in 2013 and distributes MAN, Western Star and Dennis Eagle trucks throughout Australia, New Zealand and the Pacific.

According to Roger Penske, the acquisition of MTU-DDA will bring new efficiencies to his business interests here.

"MTU Detroit Diesel Australia represents some of the most innovative and well-respected brands in the industry, including MTU, Detroit Diesel, Mercedes-Benz Industrial, Allison Transmission and MTU Onsite Energy," he said.

"As we considered opportunities to grow and enhance our business in Australia, New Zealand and the Pacific, coupling engine and power systems with our existing Western Star, MAN Truck and Bus and Dennis Eagle truck distribution business provided an opportunity to scale our existing operations in an efficient manner."

MTU-DDA will continue as a distributor of Rolls-Royce Power Systems and Daimler in Australia, New Zealand and the Pacific.

The Chief Sales Officer of Rolls-Royce Power Systems, Dr Michael Haidinger, said its customers would only benefit from the acquisition.

"Through our strategic partnership with MTU-DDA and Penske, our regional customers will be offered a world-class system and sales experience reinforcing our presence in these important markets with a trusted, experienced and world-class distribution partner," he said.

Roger Penske certainly appears to be ramping up his efforts in this part of the world. The MTU-DDA acquisition follows on from yesterday's confirmation that Team Penske will contest the V8 Supercars Championship in 2015 in partnership with Dick Johnson Racing and Marcus Ambrose, while last month Penske announced the opening of Penske Truck Rental in Australia.

It's not the first time Penske has been associated with Detroit Diesel – Penske Automotive Group actually bought Detroit Diesel in 1988 and owned it until 2000, when it sold it to Daimler. It also operated Detroit Diesel in Australia and New Zealand for a number of years through that period.

Roger Penske says the acquisition of MTU-DDA is a logical step in expanding his presence here.

"We looked at how we might be able to extend our footprint, and with Rolls-Royce Power Systems owning MTU, and with Daimler owning Detroit Diesel, we felt that with our experience it [the purchase of MTU-DDA] might be a good opportunity," he said.

Mr Penske also said the entry into V8 Supercars was a great fit for its operations.

"This auto racing venture makes so much sense to us because we can use the racing series as customer entertainment, we can display the trucks that we represent throughout the country, we can partner with the [truck] dealers at the events, and I think it will give us the ability to build our brand value in the country," he said.

"It's perfect, it's our DNA. In our service business here [in the US] we have a leasing company with over 200,000 vehicles. We rent them, we lease them, we service them – and we want to replicate that in your part of the world."

The MTU-DDA acquisition is due to be completed in the fourth quarter of 2014 and will bring an estimated $225 million to $250 million in annualised revenue to the Penske Automotive Group. Headquartered in Bloomfield Hills, Michigan, USA, Penske Automotive Group operates in the USA, Europe, Australia and New Zealand and currently employs approximately 19,900 people.

Penske to acquire MTU-DDA

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