Rolls-Royce has announced its decision to acquire the remaining stake in Tognum from its joint venture partner in order to expand its presence in the market.

Rolls-Royce had formed a joint venture with Daimler about three years ago. The company is now spending £1.9 billion to buy out its partner's stake in the 50-50 venture. Analysts have said that Rolls-Royce's earnings will rise five or six per cent. Officials said that the ability to control the entire company will allow the company to gain potential synergies with other part of Rolls-Royce.

Following the reports of a buyout, the shares of the company rose 1.6 per cent compared to an overall fall in the FTSE 100. The engineering giant pulled the FTSE 100 index yesterday as the investors showed confidence over the deal.

The FTSE also fell below its 50-day simple moving average level indicating that the index might fall in the coming months. Anglo American and Glencore Xstrata were among the biggest losers in the FTSE 100 index. The blue-chip FTSE 100 index closed down by 0.4 percent, or 23.22 points at 6,689.45 points.