Wartsila Acquires Deutz Marine Engine Service Business

Wartsila will acquire the assets of the DEUTZ AG's medium and large marine engine service business. The acquisition price is EUR 115 million, including fast moving spare parts stock.

The business consists of original spare parts sales, repair and maintenance for DEUTZ medium and large marine diesel engines. This portfolio covers medium-speed and high-speed engines with outputs ranging up to 7,250 kW.

This deal will increase the installed engine base for Wartsila Service by 12,500 MW or by 9%. Today Wartsila's installed engine base is 130,000 MW.

Wartsila will use the DEUTZ Marine brand name and will be the supplier of original spare parts and services including technical support for the DEUTZ medium and large marine engines worldwide.

DEUTZ retains new sales and service of compact engines, stationary power and gas engines.

The parties aim to close the transaction in the first four months of 2005. The deal is subject to competition authority approvals.

Wartsila's President & CEO Ole Johansson: "Wartsila has consistently and successfully expanded its Service business in recent years by increasing the scope of services and by acquisitions in the Ship Power market – in line with our strategy. The transfer of the DEUTZ marine service business to Wartsila is a logical step to further strengthen our position globally. DEUTZ marine customers will benefit from Wartsila's wide range of services and global network in 60 countries".

Wartsila Nederland B.V, in Zwolle will act as the product company for DEUTZ medium and large marine engines. The DEUTZ workshops in Hamburg, Harlingen, and Montreal will be taken over by Wartsila and remain operative. In other locations DEUTZ marine service will be integrated with Wartsila.

The transfer of the marine engine service business comprises the customer information, know-how, use of brand, use of intellectual property, spare parts stock and logistics worldwide. Approximately 200 people from DEUTZ's organization will move to Wartsila in different parts of the world.

The DEUTZ service portfolio for medium and large marine engines covers the following engine types:

Medium-speed engines: 628

High-speed engines: 616, 620

Older medium-speed and high-speed engine types, including: 716, 816, 232, 234, 601, 602, 603, 604, 528, 440, 441, 444, 500, 501, 510, 540, 640 ,645,

The acquisition is in line with Wartsila's strategic focus to grow in the Service and Ship Power markets. Wartsila will benefit from an increased customer base and new prospects for Ship Power service sales. Owners will benefit from engine lifetime extension through:

Wartsila's worldwide service network and support

Service and maintenance agreements

Reconditioned parts and reconditioned engines

Upgrades and modernization packages and special products

Wartsila Corporation is the leading ship power supplier for builders, owners and operators of vessels and offshore installations. Wartsila has a global service network to take complete care of customers' ship machinery at every lifecycle stage in more than 60 countries.

In 2003 Wartsila generated EUR 2.4 billion net sales and the number of employees is 12,000.

With annual sales of about EUR 1.2 billion DEUTZ is one of the world's leading independent suppliers of diesel and gas engines that are used in construction and agricultural machinery, power generating plant, ships, and commercial and rail vehicles.

DEUTZ customers are served by 22 subsidiary companies, 14 representative offices, 20 service centers, and more than 800 sales and service partners in more than 130 countries all over the world.