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EXHIBIT 99.1
R-1234
Contact: Suzanne Truskowski
Manager, Public Affairs
Detroit Diesel Corporation
Phone: 313.592.7642
Fax: 313.592.5058
FOR IMMEDIATE RELEASE
DETROIT DIESEL CORPORATION ANNOUNCES TENDER OFFER
TO ACQUIRE OUTBOARD MARINE CORPORATION
DETROIT, MI and WAUKEGAN, IL, July 9, 1997 -- Detroit Diesel Corporation
(NYSE: DDC) and Outboard Marine Corporation (NYSE: OM), today jointly
announced the signing of a definitive agreement and plan of merger under
which DDC will acquire Outboard Marine Corporation (OMC). Detroit
Diesel will shortly commence a two-step transaction to acquire the
outstanding common shares of OMC for $16 per share. The transaction's
two steps are first: a tender offer for approximately 67% on a fully
diluted basis of the outstanding OMC shares in cash; then, in step two,
to purchase the remaining shares for a combination of cash and 4 million
shares of DDC common stock. The aggregate value of the transaction is
approximately $500 million, including the assumption of OMC's existing
debt of approximately $180 million. In addition to the equity offering,
DDC's acquisition will be financed through a newly established credit
facility.
The agreement, which is subject to customary conditions, provides
for the merger of a newly-formed subsidiary of Detroit Diesel with OMC
following the completion of the tender offer. The board of directors of
Outboard Marine has approved the offer and the merger.
Roger S. Penske, Chairman of Detroit Diesel said, "Our objective
is to further expand our worldwide marine capabilities beyond diesel
engines with the OMC enterprises. OMC, as a leading boat and marine
gasoline engine manufacturer, affords us the opportunity to enhance
skills and resources in new product development, manufacturing
processes, marketing, sales and distribution, and customer service. In
addition, we look forward to the prospect of further developing OMC's
proprietary FICHT(TM) fuel injection technology to optimize the
performance, fuel economy and emissions capability for the next
generation of marine and other engines. The DDC/OMC combination
represents an additional example of our commitment to generate long-term
earnings growth and maintain technology leadership for our
shareholders."
Referring to OMC's previously announced decision to explore
strategic alternatives in order to maximize shareholder value, Harry W.
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Bowman, Chairman of Outboard Marine Corporation, said, "We are very
pleased that our process has resulted in an agreement to team OMC with
Detroit Diesel, a company which has achieved great growth and excellent
performance in engineering, manufacturing and marketing its products.
With OMC's shareholders being offered the opportunity to participate in
DDC's future, along with the cash consideration being offered, we
believe this offer maximizes value for our current owners. The merger
also provides the opportunity for an optimistic future for our dealers,
their customers, and our employees. This is a very positive development
for OMC worldwide and the marine industry as well."
Timothy D. Leuliette, Vice Chairman of Detroit Diesel said, "With
OMC's leading market positions, and its recognized and respected brands
such as Johnson (R) and Evinrude (R), there are many opportunities to expand
our marine business and capitalize on synergies between DDC and OMC
operations. We will proceed with our tender offer shortly, subject to
normal regulatory approvals, and plan to close the subsequent merger
transaction within the next 90 days."
Combined net revenues for Detroit Diesel and Outboard Marine
Corporation in 1996 would have been $3.2 billion.
Outboard Marine Corporation is a leading global manufacturer and
marketer of marine engines and boats and related parts and accessories.
It is the second largest manufacturer of outboard engines in the world
and the second largest boat builder in the United States. Some of OMC's
products, including Johnson(R) and Evinrude(R) outboards, and Chris-Craft(R),
Grumman(R), Four Winns(R) and Stratos(R) boats, are among the most widely
recognized brands in the world. OMC manufactures products for world
markets in facilities located around the globe. Approximately 80% of
OMC sales are in North America, the world's largest market for marine
products.
Detroit Diesel Corporation is engaged in the design, manufacture,
sale and service of heavy-duty diesel and alternative fuel engines,
automotive diesel engines, and engine-related products, and provides
financing through Detroit Diesel Capital Corporation. The Company
offers a complete line of diesel engines from ten to 10,000 horsepower
for the on-highway truck; construction, mining and industrial;
automotive; coach and bus; marine; power generation; and military
markets. Detroit Diesel services these markets directly and through a
worldwide network of more than 2,500 authorized distributors and
dealers.
Detroit Diesel's major shareholder is a wholly-owned subsidiary
of Penske Corporation, a closely-held, diversified transportation
services company which conducts its business through a number of wholly-
or partially-owned companies, including Penske Truck Leasing Company,
Diesel Technology Company, AG Kuhnle, Kopp and Kausch, Penske
Automotive Group, Inc., Penske Auto Centers, Inc., Penske Motorsports,
Inc., and Penske Capital Partners. The Penske group of businesses has
annual revenues exceeding $6 billion and employs more than 25,000 around
the world.
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Detroit Diesel Corporation's World Wide Web address is
http://www.detroitdiesel.com.
Outboard Marine Corporation World Wide Web address is
http://www.OMC-online.com
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