STUTTGART, Germany (Reuters) - DaimlerChrysler AG said on Friday that it was talking to five investors about the sale of its aero-engine business MTU as government opposition to a foreign takeover threatened to delay a deal.
Company sources said that the auto giant expected to raise 1.5 billion euros ($1.6 billion) from the sale of MTU, a defense supplier that the government wants to stay in German hands.
"We are in talks with five partners, but the talks are still at an early stage," DaimlerChrysler spokesman Hartmut Schick said, adding that the handful of interested parties did not include a German bidder.
Schick said, however, that DaimlerChrysler was interested in finding a "European solution" and was certain that the German government would find that acceptable.
The government has grown increasingly concerned about defense technology falling into foreign hands after the world's leading maker of non-nuclear submarines, HDW, was sold to U.S. investor One Equity last year.
"As far as MTU is concerned, I hope this very important company remains in German hands," German Economy Minister Wolfgang Clement said in an interview with Reuters on Thursday.
But he said planned legislation giving Berlin a veto over foreign takeovers of defense firms was not aimed at specific cases and would not come into force before the end of 2003.