EC reviews 800m pounds Rover sale to BMW

THE European Commission will review the planned pounds 800m sale of Rover by British Aerospace to BMW of Germany.

BAe announced the sale last month, fuelling speculation over the car company's long-standing links with Honda of Japan, which has a 20 per cent stake in Rover.

British Aerospace said that the European Commission's review was 'perfectly normal procedure' and it expected no problems. The Commission will decide by the middle of next month whether to approve the deal or launch a full investigation.

BAe said that BMW and Rover would together have 6 per cent of the European car market and that this was unlikely to be considered a threat to competition.

Earlier this week, Bernd Pischetsrieder, BMW's chairman, said the German group would invest at least pounds 360m a year in Rover for the rest of the decade.

Mr Pischetsrieder also said that the link with Honda was unlikely to be severed in the near future because the Japanese group's relationship with Rover was two-way, with Honda supplying motors, transmissions and design licences to Rover, while Rover supplied body panels for the Honda Accord and assembled Honda Concertos.