Penske expands engines, power business in Australia, Pacific

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Automotive News / September 16, 2014

Penske Automotive Group Inc. today said it is buying a company that distributes diesel and gasoline engines and power systems in Australia, New Zealand and the Pacific markets.

Penske will buy MTU Detroit Diesel Australia, which distributes engines and power systems to trucking, mining, power-generation, construction, industrial, rail, marine, agriculture, oil and gas and defense industries.

The deal is expected to close in the fourth quarter and contribute an estimated $225 million to $250 million in annualized revenue to Penske. Terms were not disclosed.

“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,” said CEO Roger Penske.

Penske Automotive bought commercial vehicle distributor Western Star Trucks Australia from Transpacific Industries Group in 2013. Western Star Trucks Australia distributes Western Star, Dennis Eagle and MAN medium- and heavy-duty trucks through more than 80 independent dealers in Australia, New Zealand, Indonesia, the Philippines and Papua New Guinea.

Penske will acquire MTU-DDA from its two primary distribution partners, Daimler AG and MTU Friedrichshafen, which is an affiliate of Rolls-Royce Power Systems. MTU-DDA will continue to be a strategic distributor of Rolls-Royce Power Systems and Daimler in the region.