Red Cat Holdings will offer €39.00 in cash for every share of Steyr Motors AG, the Austrian company whose diesel engine powers the Variant 7 drone boat Red Cat builds in Georgia and Maine, the Salt Lake City defense drone maker said on October 19.

Across Steyr’s 5,251,261 shares, the bid values the company at about €205 million. Anchor shareholder B&C Holding Österreich has irrevocably agreed to tender its stake of roughly 15%, and the acceptance period is set to close on December 18.

Red Cat has already walked away from Steyr once this year. On July 28 it said it had withdrawn a non-binding proposal for the company, and six days later its Blue Ops unit announced it had fitted a Volvo Penta diesel into the V7.

Red Cat Needs Half of Steyr’s Shares, and B&C Brings 15%

The €39.00 price is 28.9% above Steyr’s October 16 close. It also tops the 30-day volume-weighted average by 27.3% and the 52-week low by 55.8%. The offer succeeds only if Red Cat reaches 50% of the shares plus one and wins approval in Austria, Italy, Australia and the UK.

B&C’s stake covers about 788,000 shares against the roughly 2.63 million Red Cat needs. Steyr CEO Julian Cassutti said in Red Cat’s announcement that he will tender his own shares, and supervisory board chair Rolf Wirtz said the board views the deal favorably, pending the final offer document. Steyr’s own notice names the bidder as SMOT Acquisition GmbH in Vienna and puts completion in the first half of 2027.

A 50% threshold also means Red Cat can win and still own a listed company with public minority shareholders, as drone industry veteran Brandon Torres Declet pointed out on X. Neither company’s announcement says what Red Cat plans for shares that stay outside the offer.

Steyr Cut Its 2026 Forecast Three Weeks After Red Cat Withdrew

On August 17, Steyr lowered its 2026 revenue guidance to roughly €56 million to €61 million, down from €75 million to €95 million, and withdrew its 2027 outlook. The company blamed delays in international defense projects, which left about €10 million of planned first-half revenue unrealized.

First-half adjusted EBIT came in at €0.1 million. The 52-week low that Red Cat’s premium is measured against works out to about €25 a share. NuWays, which covers Steyr, still puts fair value at €49, about a quarter above the bid, according to Trending Topics.

Blue Ops Added Volvo Penta So V7 Output Wouldn’t Hinge on One Engine Maker

Blue Ops president Barry Hinckley told WorkBoat Blue Ops added the Volvo Penta D4-320 in August because it wanted more engine vendors, so production of the V7, which launched on Steyr’s 270-horsepower six-cylinder diesel, would not depend on one maker’s capacity.

Red Cat’s May 28 release on full-rate production of the “U.S.-built” Variant 7 named the Steyr engine, and WorkBoat’s launch coverage gave its specs. Red Cat’s own August 3 release was gentler than Hinckley, presenting Volvo Penta as more choice for customers and access to a global service network.

Blue Ops is the maritime unit Red Cat partly funded with a $46.75 million share sale in June 2025 and later built out with a 155,000-square-foot plant in Georgia. Monday’s announcement pitches Steyr as part of that USV strategy. Red Cat says it will keep Steyr’s headquarters, factory and R&D in Austria and keep selling to Steyr’s other customers, which buy its engines for military special vehicles, boats, and auxiliary power units in main battle tanks and locomotives. “We see Austria as central to the future of the business,” CEO Jeff Thompson said.

Steyr already sells into drones beyond Red Cat. Three days before the bid, it announced it will supply M12 generator units for the ground charging system of the Grille 9X, an all-electric medevac and resupply drone from German maker Avilus.

DroneXL’s Take

Buying Steyr is the right call for Red Cat, and it shows that “U.S.-built” defense hardware still runs on allied parts. The V7 is assembled in Maine and Georgia, and its engine comes from a factory in Steyr, Austria. Red Cat could have tried to stand up a marine diesel line at home. It chose to pay a premium and ask four governments for approval to secure a supplier it already relies on. My read is that Steyr’s August forecast cut is the reason Red Cat gets to buy at €39 rather than the €49 NuWays puts on the company. Allied supply chains are how capable hardware gets built quickly, and nobody can decree one into existence. I made the same argument in DJI and the American drone delusion in January.

Sources: Red Cat Holdings via GlobeNewswire, Steyr Motors AG, WorkBoat, Trending Topics, Brandon Torres Declet on X.

DroneXL uses automated tools to support research and source retrieval. All reporting and editorial perspectives are by Haye Kesteloo. Read our editorial standards.