Red Cat Holdings announced a €205 million (~$225 million) cash bid for Steyr Motors AG, the Austrian engine maker that powers its Variant 7 unmanned surface vessel. The bid at €39 per share requires 50% acceptance and approval from Austria, Italy, Australia and the UK, with closing targeted for the first half of 2027.
What's happening
- Red Cat bid €39 cash per share for all 5,251,261 Steyr shares, valuing the company at €205 million (~$225 million).
- Anchor shareholder B&C Holding Österreich holding roughly 15% of Steyr has irrevocably agreed to tender, covering about 788,000 shares.
- Red Cat needs 50% plus one share to win and must secure regulatory approval in Austria, Italy, Australia and the UK.
- The acceptance period runs through December 18, with completion targeted for H1 2027.
Why it matters
- Steyr's diesel engines power the V7 at full-rate production, and Red Cat chose acquisition over building a domestic marine diesel capability.
- The deal secures a single supplier for the V7 production line, addressing Red Cat's earlier July withdrawal of a non-binding proposal and August addition of Volvo Penta as a secondary engine option.
- Austrian and allied manufacturing remains critical to U.S.-built defense hardware, with V7 assembly occurring in Maine and Georgia but engines supplied from Steyr.
- Steyr supplies engines beyond Red Cat for military special vehicles, boats, auxiliary power units in main battle tanks and locomotives, preserving those customer relationships.
Going deeper
- Red Cat previously withdrew a non-binding proposal on July 28 and announced the Volvo Penta addition on August 3, signaling either negotiation tactics or genuine supplier diversification concerns.
- Steyr cut 2026 revenue guidance to €56 million to €61 million on August 17, down from €75 million to €95 million, due to international defense project delays costing roughly €10 million in first-half revenue.
- Red Cat's €39 bid represents 28.9% premium over Steyr's October 16 close and 27.3% above the 30-day volume-weighted average, but sits below NuWays analyst fair value of €49 per share.
- Red Cat raised $46.75 million via share sale in June 2025 to fund Blue Ops maritime operations and built a 155,000-square-foot Georgia facility.
Financial impact
- Red Cat will pay €205 million (~$225 million) in cash at closing, timing H1 2027; the bid represents acquisition of Steyr's revenue stream including non-Red Cat customers.
- Steyr's 2026 revenue guidance of €56 million to €61 million and first-half adjusted EBIT of €0.1 million establish baseline post-acquisition earnings contribution.
- Red Cat's cash position will absorb the purchase price in H1 2027; balance sheet will add Steyr's tangible assets, inventory and customer contracts as acquired assets with potential goodwill.
- Red Cat may hold Steyr as a public company with minority shareholders if acceptance falls between 50% and 100%; accounting treatment depends on final ownership stake achieved.
The intrigue
- Red Cat needs only 50% acceptance and can own a listed company with public minority shareholders, creating uncertainty about future liquidity and governance for remaining Steyr investors.
- Neither announcement discloses Red Cat's plans for Steyr shares that stay outside the offer, suggesting potential squeeze-out or indefinite minority status.
- Steyr announced supply of M12 generator units for Avilus' Grille 9X electric drone three days before Red Cat's bid, indicating Steyr's independent growth path and possible strategic value beyond Red Cat's V7 program.
The fine print
- Bid requires 50% shareholder acceptance, meaning Red Cat can succeed and remain a 50-plus owner of a listed company with public shareholders.
- Regulatory approval required in Austria, Italy, Australia and the UK; completion targeted for H1 2027 but not guaranteed.
- Red Cat has already withdrawn one non-binding proposal on July 28, creating execution risk and potential for further negotiations or withdrawal.
Source: dronexl.co · Oct 19, 2026 · Drafted with Claude, reviewed by Industrial Base Alpha.
