LONDON -- Three buyout firms are vying to buy DaimlerChrysler's heavy diesel engine unit, MTU Friedrichshafen, for more than 1 billion euros ($1.2 billion), sources familiar with the situation said on Monday.
Buyout firm Kohlberg Kravis Roberts is considered the front runner to buy the unit but is competing with rivals EQT and CVC Capital Partners as the auction enters its final round, the sources said.
Final bids for the business are likely next month, with a sale agreement possible before the end of the year, the sources said. Carlyle Group, which had also pursued the business, is no longer in the auction, the sources said.
"Carlyle is not part of the smaller group of preferred bidders," a source familiar with the talks confirmed to Reuters on Monday.
Carlyle declined to comment.
Daimler said on Friday, Oct. 14, that it had ceased negotiations with German industrial group MAN AG, which MAN confirmed over the weekend.
The disposal is estimated to be worth upwards of 1 billion euros and is seen as a key part of Daimler's plans to finance its program of 950 million euros in job cuts at its Mercedes Car Group division in Germany.