Now here's an odd turn of events for you. If you buy into the so-called conventional wisdom, European companies are ossified and unwilling to restructure to remain competitive.
And yet, while General Motors
In its latest move, DaimlerChrysler announced that it had reached an agreement to sell its off-highway business to the Swedish buyout firm EQT. While the company was a bit slippery in talking about its take from the deal, it would seem that it's getting about $1.2 billion in cash from the transaction. With the deal giving the unit an overall enterprise value of about $1.9 billion, EQT would appear to be paying a multiple of just above 1 times revenue for the business, if we annualize the sales through the last nine months.
And what is the business? DaimlerChrysler Off-Highway includes the heavy-motor business MTU Friedrichshafen, as well as the off-highway business of Detroit Diesel. In plainer English, this is a business focused on engines and motors for applications like marine transport, locomotives, power generation, and an assortment of agricultural, mining, construction, and other off-road heavy machinery.
Looking beyond DaimlerChrysler, I'm not sure this deal will make a huge impression on other publicly traded companies. Yes, Cummins
As for other competitors such as Caterpillar
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).