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Saturday, 19 May, 2001, 00:44 GMT 01:44 UK
BMW completes deal with MG Rover
Worker at a Rover car plant
BMW will produce the new Mini at Cowley in Oxford
German carmaker BMW has completed the break-up of Rover Group and sold its engine manufacturing at Longbridge, near Birmingham.

Powertrain Ltd, valued at 150m, will be transferred to MG Rover, which bought the Rover brand from BMW for a nominal sum in May last year.

The sales marks the end of BMW's troubled association with MG Rover.

MG Rover Group chief executive Kevin Howe said: "We are delighted that all the outstanding issues relating to the completion accounts have now been agreed with BMW.

'Milestone'

"Furthermore our ownership of Powertrain Ltd enables us to have full control of our engine development and production programmes and delivers yet another or our key strategic milestones."

The move means that the group will now be able to produce engines and transmissions for itself and third party customers.

It will also have control over the prices of the 150,000 engines and gearboxes it purchases each year.

Employees

The agreement reached also involves a payment of 65m to MG Rover, its spokesman said.

About 1,300 employees will be transferred with the business.

MG Rover's ownership of Powertrain will bring back together two parts of the old Rover group which was broken up by BMW last year.

When the contract between BMW and MG Rover was signed last year the operating activities of Rover Cars were transferred with immediate effect.

BMW is still in negotiations with several possible buyers for its profitable metal pressing plant in Swindon. Reports suggest that engineering group Mayflower is considered to be the most likely buyer.

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See also:

10 May 01 | Business
BMW profits quadruple
09 May 01 | Business
MG Rover boss paints bright future
04 May 01 | Business
MG Rover - One year on
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