Graham Morris, Rolls Royce Chief Executive: "There was no UK company of any size we could link up with"

The final decision was taken by the shareholders of Vickers, RRMC's parent company, at an extraordinary meeting on Friday morning. Just after 14:00 BST Vicker's chairman, Sir Colin Chandler, announced that 5.1m of shareholders had voted in favour of Volkswagen and 109,000 against.

Rolls-Royce Motor Cars (RRMC) has now fallen into foreign hands for the first time in its 92 year history. Volkswagen is Germany's and Europe's largest car maker.

The meeting had been stormy, with angry outbursts from small investors who wanted to keep the luxury carmaker British.

Shareholder vote

Until Friday morning, Volkswagen's offer had been the highest on the table. It struck a £430m deal with Vickers in April, although the total consideration could be up to £470m to reflect the rise in working capital in the business.

A mini Rolls-Royce?

Vickers has promised a large payout to investors from the proceeds of the disposal, equivalent to at least 80p a share.

With 95% of Vickers shares held by institutional investors, it was almost certain that the shareholders would follow the board's advice, and analysts had predicted that Volkswagen would win comfortably.

Volkswagen is understood to be planning to invest up to £2bn in the group to bring its annual production up to 10,000.

Overtaking the competition

Volkswagen managed to beat a rival £340m bid from Munich-based car maker BMW, and a last-minute wildcard entry from a group of Rolls fans calling themselves Crewe Motors, after the town in which the cars are made.

Vicker's shareholders rejected the BMW bid early in their deliberations. The meeting was then adjourned to allow the board of Vickers to consider the last-minute bid of Crewe Motors.

Michael Shrimpton, the Bentley driving barrister who was leading Crewe Motors audacious takeover attempt, had managed to confirm his £460m offer only five minutes before the start of the Vickers shareholder meeting.

He had asked the board of Vickers to delay the vote by several weeks in order to give his group a chance to have a thorough look at Rolls-Royce's operations. However, his request was denied, as that could have delayed the final sale of the business until September.

Both the board and shareholders formally rejected the Rolls fans's offer.

Corporate soap opera

The sale of Rolls-Royce had sparked a war between Germany's car giants. Vickers put the business up for sale last October and Volkswagen made an initial offer, believed to have been around £315m, in January.

Rolls-Royce production is likely to increase dramatically

Its arch rival BMW, which already owns British car group Rover, entered the fray in March, offering £340m for the group. But Volkswagen fired back just weeks later with what analysts considered to be a knock-out £430m bid.

Legal battle looming

Volkswagen may have won the bidding war, but its problems are not over. The rights to the Rolls-Royce name are still owned by the quoted engineering group with the same name.

Rolls-Royce Plc has strong business links with BMW and had backed the German car group's bid. It is understood to be seeking up to £100m from Volkswagen for the right to use of the famous name, raising the prospect of a legal wrangle between the two companies.

It's only an image and a name, but it may cost £100m

On Friday, BMW repeated its threat that it would pull out of its contract to supply engines for the Rolls-Royce cars after a Volkswagen victory. But VW looks to have side-stepped that particular dilemma by agreeing to buy Cosworth, Vickers high performance engine subsidiary, for £120m.

Rolls-Royce, however, will face tough competition. Mercedes-Benz wants to revive the famous Maybach brand, and BMW announced on Friday that it was considering to develop a new luxury model on its own.

For both Volkswagen and BMW, the result turned out to be a stock market success. VW's share prices rose by nearly 3%, while BMW shares reached a record-high.

End of an era

RRMC was founded in 1906 by Henry Royce, a Manchester engineer, and Charles Rolls, a millionaire's son. It became part of the Rolls-Royce engineering group before being sold to Vickers for £38m in 1979.

RRMC built a record 3,333 cars in 1990 but sales were hit by the Gulf War and the group crashed to a £100m loss in 1992/3. Since then, however, its financial position has recovered strongly.

It currently produces just under 2,000 vehicles a year and has recently introduced the Silver Seraph, the first new Rolls-Royce for 18 years.