WhipLash
11-04-2000, 08:52 AM
THE Quandt family is preparing to sell BMW and will seek a price of at least £20 billion for the company, say motor-industry insiders. They believe Ford and Volkswagen are likely to compete to buy the Munich-based business. However, one BMW executive has claimed that he believes Ford is negotiating with VW to divide up the BMW group marques - with Ford buying BMW and VW taking Rolls-Royce. Both companies are believed to want Mini. The BMW executive said Ford could make the Mini at Dagenham, thereby saving the apparently doomed body and assembly plant at the east London site.
BMW's market worth, now almost £12.2 billion, has soared since it announced last month that it was selling Rover's Longbridge plant to the private equity firm Alchemy, which is aiming to run down Rover car production and concentrate on making MG-branded cars at the plant. Ford agreed to buy Land Rover last month for almost £1.9 billion. It has the financial firepower to outgun the smaller VW in a bidding war for BMW, but VW could have an inside track because of domestic pressure on the Quandts to keep BMW German. General Motors, which is also keen to buy BMW, is said to be an outsider in what is being seen as a two-horse race. A pivotal role in the sale will be played by Siemens, the Munich-based electronics giant. Siemens is understood to hold a stake of more than 10% in BMW.
A sale by the Quandts will not be concluded until next year - that is when the capital-gains tax rates in Germany are due to be slashed. The family's involvement with BMW began 40 years ago when the late Herbert Quandt saved the company from imminent takeover by Daimler-Benz. But the younger Quandt generation is said to be disenchanted with the car business. It is understood that the Quandts want to reinvest in the technology and media sector. The BMW executive said that, under Ford's plan to split the business with VW, VW would also acquire BMW's Oxford factory, formerly known as Cowley, where BMW is planning to make the new Mini. If Ford acquired Mini, he added, it would make the vehicle at Dagenham. If VW bought it, then Mini would go to Oxford and carmaking at Dagenham would end. VW would sell Mini as a lifestyle product alongside the new Beetle. A Ford takeover of BMW would mean that the American group would change the image of Jaguar, its British luxury-car arm. At present, Jaguar is being targeted at the sporty, high-tech segment of the executive-car market dominated by BMW. Ford would aim to modify Jaguar's image to compete more with Mercedes. One recent report in the Bavarian press quoted a member of the Quandt family as saying that the company's long-held strategy of independence would be reviewed in the autumn. But the BMW executive said he believed an agreement with Ford could be reached within six weeks.
BMW's market worth, now almost £12.2 billion, has soared since it announced last month that it was selling Rover's Longbridge plant to the private equity firm Alchemy, which is aiming to run down Rover car production and concentrate on making MG-branded cars at the plant. Ford agreed to buy Land Rover last month for almost £1.9 billion. It has the financial firepower to outgun the smaller VW in a bidding war for BMW, but VW could have an inside track because of domestic pressure on the Quandts to keep BMW German. General Motors, which is also keen to buy BMW, is said to be an outsider in what is being seen as a two-horse race. A pivotal role in the sale will be played by Siemens, the Munich-based electronics giant. Siemens is understood to hold a stake of more than 10% in BMW.
A sale by the Quandts will not be concluded until next year - that is when the capital-gains tax rates in Germany are due to be slashed. The family's involvement with BMW began 40 years ago when the late Herbert Quandt saved the company from imminent takeover by Daimler-Benz. But the younger Quandt generation is said to be disenchanted with the car business. It is understood that the Quandts want to reinvest in the technology and media sector. The BMW executive said that, under Ford's plan to split the business with VW, VW would also acquire BMW's Oxford factory, formerly known as Cowley, where BMW is planning to make the new Mini. If Ford acquired Mini, he added, it would make the vehicle at Dagenham. If VW bought it, then Mini would go to Oxford and carmaking at Dagenham would end. VW would sell Mini as a lifestyle product alongside the new Beetle. A Ford takeover of BMW would mean that the American group would change the image of Jaguar, its British luxury-car arm. At present, Jaguar is being targeted at the sporty, high-tech segment of the executive-car market dominated by BMW. Ford would aim to modify Jaguar's image to compete more with Mercedes. One recent report in the Bavarian press quoted a member of the Quandt family as saying that the company's long-held strategy of independence would be reviewed in the autumn. But the BMW executive said he believed an agreement with Ford could be reached within six weeks.