Red Cat Holdings has come back for Steyr Motors. On Oct. 19 the Salt Lake City drone maker's Vienna-based subsidiary, SMOT Acquisition GmbH, announced plans for a voluntary public tender offer of EUR 39.00 in cash for every share of the Austrian engine builder, according to Steyr Motors' investor relations notice. Across Steyr's 5,251,261 shares, the bid values the company at about EUR 205 million, DroneXL reported.

The bid comes less than three months after Red Cat dropped an earlier approach. Steyr builds the 270 hp six-cylinder diesel that the Variant 7 (V7) uncrewed surface vessel was launched with, according to DroneXL, so Red Cat is now trying to buy a supplier whose engine it had already added an alternative to.

The Offer

Steyr's notice puts the premium at 28.9% over the Oct. 16 closing price and 55.8% over the stock's 52-week low. SMOT Acquisition is wholly owned by Red Cat, which trades on Nasdaq as RCAT.

The deal already has its first commitment. B&C, which holds about 788,000 Steyr shares or roughly 15% of the company, has irrevocably agreed to tender, per DroneXL. Trending Topics reported that Steyr CEO Julian Cassutti also intends to tender his shares.

The remaining conditions are significant. The offer needs acceptances for 50% of the shares plus one, about 2.63 million shares. DroneXL reports it also needs regulatory approval in four countries: Austria, Italy, Australia and the United Kingdom. The acceptance period is expected to close Dec. 18, and Steyr's notice puts completion in the first half of 2027, subject to regulatory clearances.

The July Walkaway and the August Hedge

Red Cat has been here before. On July 28 it withdrew a non-binding proposal to acquire Steyr, DroneXL reported. Six days later, on Aug. 3, Red Cat announced that its Blue Ops unit had completed the first integration of a Volvo Penta D4-320 diesel engine and DPI drive into the Variant 7, adding to the vessel's propulsion options.

Red Cat's release presented the Volvo Penta integration as a matter of customer choice and access to Volvo Penta's global service network. DroneXL reports that Blue Ops president Barry Hinckley told WorkBoat the company wanted more engine vendors so V7 production would not depend on one maker's capacity. Read alongside the July withdrawal, the timing suggests Red Cat was lining up an alternative to Steyr's engine before any talks resumed. Trending Topics, citing NuWays Research, describes Steyr as one of two engine suppliers for the V7, which is currently Blue Ops' only model.

Steyr's own position weakened over the same period. On Aug. 17 the company cut its 2026 revenue guidance to about EUR 56-61 million, down from EUR 75-95 million, and withdrew its 2027 outlook, according to DroneXL, which attributes the cut to delays in international defense projects. DroneXL's read is that the forecast cut is why Red Cat gets to buy at EUR 39 rather than the EUR 49 fair value that NuWays, an analyst firm commissioned by Steyr, puts on the company. DroneXL calculates that the 52-week low the premium is measured against works out to about EUR 25 a share.

What Red Cat Is Buying

Red Cat builds drones and robotic systems for defense and national security, including the Black Widow reconnaissance drone, according to Trending Topics. The outlet notes that the company's revenue is growing fast but so are its losses. It also reports that Red Cat raised about $225 million through a share offering in the spring and that, per the press release, the Steyr offer is "fully financed."

The target is an engine maker, not a drone company. Steyr's engines are primarily used for military special vehicles, boats and auxiliary power units for main battle tanks and locomotives, per its notice. Buying Steyr would give Red Cat ownership of the maker of the engine the V7 launched with. Red Cat intends to maintain Steyr as an Austrian center of excellence, with existing jobs safeguarded and manufacturing and research and development remaining on site, according to the Steyr notice. DroneXL adds that Red Cat will keep selling to Steyr's other customers. "We see Austria as central to the future of the business," Red Cat CEO Jeff Thompson said, as quoted by DroneXL and in Steyr's notice.

Why It Matters

Trending Topics reports that Blue Ops plans to build more than 1,000 unmanned surface vessels in 2027. A volume target like that puts weight on the supply of propulsion, and the outlet's framing is that whoever owns the propulsion controls a key part of the supply chain. By trying to buy Steyr, Red Cat is moving to own part of that chain.

The sequence of events is unusual: a withdrawn bid, a second engine option announced six days later, the target's guidance cut, and then a new offer at a stated premium. Red Cat now has both Steyr's diesel and the Volvo Penta option on the V7. If the deal closes, Red Cat will own the maker of the engine the V7 was launched with while still offering a Volvo Penta alternative. If it fails, Red Cat still has the Volvo Penta option.

For investors and competitors, several dates and thresholds are worth watching: the Dec. 18 scheduled close of the acceptance period, whether shareholders tender enough shares to pass the 50%-plus-one threshold, and the four regulatory reviews. With B&C committed and the CEO intending to tender, Red Cat starts with a meaningful block of shares, but not enough to win on its own. DroneXL also notes that a 50% threshold means Red Cat could win and still own a listed company with public minority shareholders, and that neither company's announcement says what Red Cat plans for shares that stay outside the offer.

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