BMW May Buy Rolls-Royce Motors
British engineering company Vickers on Monday placed a “For Sale†sign on its Rolls-Royce Motors luxury car maker, and Germany’s BMW emerged as the early favorite to buy it.
Industry analysts said the unit could bring about $655 million.
Rolls-Royce, a byword for British style and quality for almost a century, could become the latest in a long line of illustrious British auto manufacturers bought out by foreign companies.
Ownership of the bulk of Britain’s motor industry has been handed over to foreign concerns. Jaguar, Aston Martin and Rover are long gone, leaving quirky specialists such as sports car companies TVR, Morgan and Caterham as the only other auto makers in British hands.
However, a number of potential bidders were quick to rule themselves out of the auction for the unit, leaving BMW as the early front-runner.
Within hours of the announcement of the planned sale, both Germany’s Daimler-Benz and U.S. auto maker Ford Motor Co., the owner of Jaguar, denied any interest in bidding. Fiat’s Italian luxury sports car manufacturer, Ferrari, later ruled itself out of contention.
BMW, however, made no secret of its interest, repeating its previous view that Rolls-Royce Motors would be a good fit. German rival Volkswagen declined to comment.
A Vickers spokeswoman said any sale would probably not be finalized before next spring.
Analysts said the timing of the announcement was a little surprising given the expected launch of a new car early in 1998, which would have maximized the company’s value. Analysts concluded that the company is either under pressure from a line of buyers pressing for a swift decision or that Vickers needed a quick disposal.
“We recognized that although we had put a lot of money into Rolls-Royce, it would go on needing quite a lot of investment that we as a general engineering company, as opposed to a specialist, would need to put elsewhere,†Vickers Chairman Colin Chandler said.
Amid the flurry of companies denying interest in bidding, a spokeswoman for Vickers stressed that it had received approaches for Rolls-Royce from more than one company, but she declined to name any of them.
The announcement sparked concern among Rolls-Royce workers, whose unions sought urgent talks with Vickers management.
Analysts said BMW’s existing links with Rolls-Royce make it seem a strong candidate.
“BMW seems to be best placed technically in as much as it is their drive train in the car, and another buyer might have to pay to re-engineer the whole range,†said Nick Cunningham, an analyst at Salomon Bros.
