Review:BMW competed with VW for takeover Rolls-Royce

In 1998, Vickers decided to sell Rolls-Royce to BMW.But they changed their mind to consider accepting VW who offered higher price.When the news of the Business Combination of Mercedes-benz and Chrysler had not been fully accepted,’the change of affection’ of Rolls-Royce brought a plot twists and turns story in automobile sector.

The main reason for Vicker to change their decision was that VW offered more attractive and higher price than BMW.

In March of 1998,VW made a price of 260 million pounds and including investment in the future the price is 500 million pounds totally.Soon After that BMW offered 340 million.At this time VW offered staggering sums of 430 million.

For Vickers, they only focus on one thing: striving for the maximize benefits for their shareholder.And since Rolls-Royce had to be sold to foreign company, then they would make a decision to choose the highest bidder.

VW must seriously deal with the threat from BMW.One reason is that BMW had provided Rolls-Royce and bentley with engine and other components for many years.Another threat is from Rolls-Royce aircraft engine company.

According to a contract about the separation between engine and automotive sector in 1973 , the aircraft engine company has the rights to use Rolls-Royce’s brand name and trademark.It is said that if Rolls-Royce motor company is to be sold, it must obtain a consent of the company.Having a veto, Rolls-Royce aircraft engine company disdained for VW and preferred to BMW.

And the rights to use trademark and brand name became the key factor of this competition.I think no matter what the result is, Rolls-Royce remains the beneficiary.Because Rolls-Royce’s equity was only 149 million pounds. And at that time, both BMW and VW’s bid had been far greater than its value. No matter whom Rolls-Royce is sold to, it would have a bright future.

About how BMW won Rolls-Royce eventually , there are two views so far .BMW stopped supplying engines, threatening to force VW to let out of the Rolls-Royce brand.When VW bought Rolls-Royce factory , they did not understand that the Rolls-Royce trademark actually belongs to the company of Rolls-Royce aircraft engines , BMW had actually controlling stake in Rolls-Royce aircraft engine company.

The most sophisticated step that BMW made in the whole process was that , they used 40 million pounds to buy Rolls-Royce brand name and trademark “RR” , making the VW even spent 10 times the price to get the factory of Rolls Royce but can not produce Rolls-Royce models.

After several consultations between them, they finally made a compromise that VW could use the trademark for 5 years from 1998 to the end of 2002, and from 2003, Rolls-Rolls would belong entirely to BMW.

At the beginning of 2003, BMW announced the establishment of Rolls-Royce Motor Cars Limited as an independent brand belonging to BMW and launched the new Phantom which is the first model from Rolls-Royce Motor Cars in January at Detroit’s North American International Auto Show.

 

referenc:

Martin Bennett (2011 ) Rolls-Royce & Bentley : the Crewe years. 3rd ed. / foreword by His Royal Highness the Duke of Gloucester.  Sparkford : Haynes

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