FRANKFURT -- Dubai International Capital is teaming up with buyout firm Kohlberg Kravis Roberts to bid for DaimlerChrysler's heavy diesel engine unit, MTU Friedrichshafen, Handelsblatt newspaper reported on Wednesday, citing sources familiar with the talks.
The Gulf emirate's government took a stake of about 2 percent in DaimlerChrysler in January.
KKR is considered the front runner to buy the unit but is competing with rivals EQT and CVC Capital Partners as the auction for more than 1 billion euros enters its final round, sources told Reuters this week.
Final bids for the business are likely next month, with a sale agreement possible before the end of the year, the sources said.
Daimler said on Friday, Oct. 14, that it had ceased negotiations with German industrial group MAN AG and MAN confirmed this over the weekend.
The disposal is estimated to be worth upward of 1 billion euros and is seen as a key part of Daimler's plans to finance its program of job cuts, costing 950 million euros, at its Mercedes Car Group division in Germany.
German daily Frankfurter Allgemeine Zeitung, citing financial sources, reported this week that bids are totaling some 1.7 billion euros due to the inclusion of two other businesses.
Apart from MTU, with its annual sales of 1.35 billion euros, Daimler is throwing in the off-highway engine activities of Detroit Diesel as well as the light truck motors from its Industrial Drive Systems unit, with sales of 400 million and 100 million euros, respectively.