BMW will fight VW for control of Rolls
Saturday 09 May 1998
BMW, whose pounds 340m bid was discarded by Rolls' parent company Vickers in favour of the higher VW offer, said it would not get involved in a "dutch auction" for the company, suggesting it will not attempt to increase its offer.
Instead BMW is relying upon Rolls-Royce plc, the aero-engine maker which owns the Rolls-Royce name, to use its legal rights to block the transfer of the trade name to VW.
As a further frustrating tactic, BMW repeated its intention to stop supplying engines for Rolls' latest models, the Silver Seraph and the Bentley Arnage, if the sale to VW went ahead - which could prompt a damages claim from Vickers.
BMW is due to outline its strategy in a statement early next week. Sources at the Munich-based company indicated it would not include an increased offer for Rolls.
Rolls-Royce plc has made no secret of its support for the offer from BMW, with which it already has a joint venture to make aircraft engines. In a statement yesterday the aero-engine group said it would "take whatever action is necessary or appropriate" to protect its interests.
The statement made no reference to VW but it pointedly "welcomed" the initial announcement by Vickers that it had agreed to sell Rolls to BMW, even though this was superseded this week by the improved VW offer.
Vickers is recommending that shareholders reject the BMW offer and instead approve the sale of Rolls to VW at an extraordinary meeting on 4 June.
In its statement yesterday the aero-engine maker said it was confident that it would be able to conclude a definitive agreement with BMW for the use of the Rolls-Royce name.
It also said that the European Commission had upheld its rights to the Rolls-Royce name under a 1973 agreement, including the right to veto the transfer of the marque to a non-UK owner.
Vickers maintains that the clause is unenforceable and a breach of EU competition law. It also argued that if the aero-engine company carried out its threat to block the deal it would end up damaging the marque. "The halo effect of the Rolls-Royce name comes from the motor car and goes to the aero-engine company, not the other way around," she added.
Under the engine contract, either party has to give the other 12 months notice of its intention to terminate the supply agreement. However, it is understood that BMW only has to give Rolls six months notice in the event that the company is transferred to a rival car maker.
BMW does not believe this would give VW sufficient time to find an alternative supply of engines, forcing it to close down the Rolls production line at Crewe.
But a VW board member, Robert Buechelhofer, indicated yesterday that it had contingency plans. "We are going on the idea that a solution of this problem would be possible in the short term," he said.
VW has offered to buy Cosworth from Vickers and then use that as a source of engine supplies. Cosworth adapts the V12 and V6 engines that BMW currently supplies for the Seraph and Bentley. VW also has its own V12 engine under development but it is not clear that would be available in time for commercial production should BMW carry out its threat to stop engine supplies.
Missing Malaysia Airlines Flight MH370: Wreckage could be found within a week as search reaches 'very critical juncture', says minister
The man they forgot to lock up: Mike Anderson was sentenced to 13 years in jail, but the police never came
Unbeliebable: The White House offers 'no comment' to anti-Justin Bieber petition
Loch Ness Monster found on Apple Maps?
South Korea ferry disaster: Families watch as remains of Sewol victims returned to shore
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
'Sinful': Video of British Muslims dancing to Pharrell Williams's hit Happy comes under attack
An open letter to Nigel Farage: you may smile, but I am not seduced
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
Abdullah Deghayes: My son was the martyr of a just cause, says father of British teenager killed in Syria conflict
- 1 Easter egg hunt horror as mother finds dead body under deck of house
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 Unbeliebable: The White House offers 'no comment' to anti-Justin Bieber petition
- 4 Loch Ness Monster found on Apple Maps?
- 5 Criminals ‘using unmanned drones and infrared cameras to find illegal cannabis farms’ – and then steal from the growers
iJobs Money & Business
Negotiable: Harrington Starr: Database Team Lead ( Leadership, Sybase, Compute...
£40000 - £50000 per annum + Bonus+Benefits+Package: Harrington Starr: C#.NET D...
£25000 - £35000 per annum + Bonus+Benefits+Package: Harrington Starr: VB.NET S...
£45000 - £55000 per annum + Bonus and Benefits: Harrington Starr: Trade Suppor...