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Monday, 1 June, 1998, 09:00 GMT 10:00 UK
BMW wins race to buy Rolls-Royce
Rolls-Royce cars
BMW: hoping to take control of the last major British-owned car maker
British luxury car maker Rolls-Royce has been sold to German giant BMW for 340m - despite promises of a higher bid from rival Volkswagen.

The owner of Rolls-Royce Motor Cars, Vickers, is expected to face anger at Wednesday's annual meeting from shareholders who wanted it to hold out for a higher price.

VW was reported to be preparing a sweetened offer - its third attempt to outbid BMW for the chance to take control of one of the world's most famous names in motoring.

BMW has been in pole position to win the race for Rolls-Royce since the Crewe-based company was put up for sale in September because it already supplies the engines. The Munich-based car maker says it will now increase R-R production from 2,000 cars a year to 6,000.

But VW recently upped the ante in the bidding war, with sources saying it was offering about 1.5bn Marks (around 500m) for the company.

Approval over summer

Vickers chairman and chief executive Sir Colin Chandler said he was "pleased to have achieved our objective of securing a very good deal for Vickers' shareholders and a strong new owner for Rolls-Royce Motor Cars". Sir Colin also unveiled plans to return 197m to shareholders.

Ordinary shareholders will receive shares in a new holding company as well as 55p per share in cash, costing Vickers a total of 188m. It will also spend 9m repaying preference shares.

After the 25m costs of the Rolls-Royce sale, the group is left with a balance of 118m to spend on acquisitions and investment in its core defence and propulsion businesses.

Shareholder approval for the sale and capital reorganisation will be sought at meetings at the beginning of June and Vickers expects them to become effective at the start of July.

See also:

01 Jun 98 | Business
Silver Seraph rolls into limelight
23 Nov 97 | Business
F1 boss looking at Rolls - report
01 Jun 98 | Business
VW trying again for Rolls-Royce
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