The Russian oligarch Oleg Deripaska, reputedly the country's youngest billionaire with a fortune estimated at $1.5bn, paid £50m yesterday to take control of the Birmingham-based van maker LDV.
Mr Deripaska has bought LDV from its private equity owners, Sun European Partners, using Gaz Group, the commercial vehicle division of his holding company Basic Element.
Gaz Group, the world's seventh largest commercial vehicle manufacturer with an annual output of 180,000 trucks, pledged to increase production from LDV's Drews Lane plant in Birmingham by 50 per cent and return it to break even within 12 months, safeguarding 850 jobs. Unions welcomed the takeover after a string of motor industry closures in the West Midlands.
LDV was put into administration last December by its previous private equity owners, EAC and 3i. At the time it was losing £4m a month, although losses are thought to have come down after Sun European took control, slashing its workforce and rationalising production down to one model, a Transit-style van called the Maxus.
Gaz Group has hired two former senior Ford executives, Martin Leach and Steve Young, to become LDV's chairman and chief executive respectively, having initially asked them to draw up a business plan for taking the company over. Commenting on the acquisition, Mr Leach said: "As Victor Kiam once remarked, we liked the deal so much that we decided to come on board and run it."
LDV's new Russian owners plan to start manufacturing the Maxus in Gaz Group's Nizhny Novgorod plant in Russia for sale in east European markets. But Mr Leach stressed there was no plan to slowly switch production from the UK to Russia. "Birmingham is a very efficient place to produce cars and trucks for sale in the European Union," he said. "No one can give an unconditional guarantee for ever but as long as we can produce satisfactorily in Birmingham, it is a great place to be."
The planned increase in production from 10,000 a year at present to 15,000 next year will be helped by the launch in September of a minivan, based on the Maxus design.
Mr Deripaska, 38, made his fortune in the 1990s by taking over state-owned aluminium smelters. He then joined Roman Abramovich, the owner of Chelsea Football Club, to create Rusal, the world's fourth biggest aluminium producer. Today, his business empire also spans energy, financial services and construction.
LDV, formerly part of British Leyland, has gone through five different sets of owners since it was privatised in 1987 through a sale to DAF, the Dutch truck company. When DAF went bust six years later, LDV was bought out by its management, who then brought in EAC and 3i in 1994. Then Sun European stepped in.