Ford buys Land Rover for £1.85bn

Ford today promised to unleash "the full potential" of Land Rover after agreeing to buy the company from owners BMW for £1.85 billion.

Ford said Solihull-based Land Rover was "a terrific global brand with a wonderful heritage".

The sale of Land Rover completes the break-up of the Rover company with London-based venture capitalist company Alchemy Partners taking on most of the rest of the business.

Land Rover boasts a workforce of 9,500 and produces Land Rover, Discovery, Range Rover and Freelander off-road vehicles. Last year, the plant turned out 166,000 vehicles.

"Land Rover is known throughout the world and fits perfectly into Ford's growing family of world-class brands," said Ford chairman William Clay Ford Junior today.

These brands include Jaguar, Volvo and Aston Martin.

BMW chairman Professor Joachim Milberg said: "The decision to sell Land Rover was certainly not easy. But in the light of our new strategy, we welcome the approach of Ford."

Union leader Bill Morris welcomed Ford's decision to buy Land Rover as a "bold" move.

Mr Morris, general secretary of the Transport and General Workers Union, said he would have preferred the entire Rover group to stay united with one owner.

He added: "We are confident that Ford have the experience to maintain Land Rover as a best in class vehicle. Land Rover and Ford are a good fit - a quality product to a quality company."

The Land Rover name will fill a niche in Ford's growing portfolio of car marques.

The American giant - the world's second biggest car-builder after General Motors - is no longer simply a maker of the family saloons that forged its name both here and in the United States.

It boasts four luxury brands in its stable - Jaguar, Aston Martin, the American Lincoln marque and Volvo, which Ford bought in a £3.7 billion deal in March last year.

At the time of the Volvo acquisition, Ford chief executive Jac Nasser said his company wanted to boost its luxury car output from 250,000 in 1998 to 750,000 this year.

"Our aim is to grow the company in luxury segments," said Nasser at the time, adding that the Volvo deal would benefit the company by "economies of scale".

The sales target will much more easily be reached as Land Rover and Range Rover arrive under Ford's famous oval blue badge, where they are likely to join the other four luxury names in Ford's new Premier Auto Group.

Ford has not been strong in the European off-road and luxury utility vehicles - so beloved by the wealthy urban family for the school-run and supermarket trip - so Land Rover will add a complementary arm to its range.