Volkswagen Bids to Acquire Rolls-Royce Motor Cars for £500m

Volkswagen, a prominent German automaker, is vying to acquire Rolls-Royce Motor Cars, the luxury car division, from Vickers for a higher bid of up to £500m, contrary to Vickers' plans to sell it to BMW for £340m. The sale of Rolls-Royce Motor Cars to BMW has been in the works for the past month, but a VW spokesman claims that the drawing-up of the BMW contract was expected, given the exclusive negotiations between the two companies. However, sources close to the VW supervisory board suggest that a new offer from Volkswagen could be worth between £400m to £500m, depending on whether the Cosworth engines arm or other Vickers activities are included.

Key Takeaways:

Volkswagen has submitted a higher bid of up to £500m to acquire Rolls-Royce Motor Cars from Vickers, challenging the planned sale to BMW for £340m.
The bid to Volkswagen's offer would need to overcome the hurdle of securing approval from Rolls-Royce plc for use of the Rolls-Royce name and bonnet badge on the cars, which has been licensed to BMW at no charge.
One source suggests that the bid could be worth between £400m to £500m, depending on the inclusion of the Cosworth engines arm or other Vickers activities.
Vickers' chairman, Sir Colin Chandler, has acknowledged that a new bid from Volkswagen would be taken seriously if it was concrete and in the shareholders' interests.
Several private shareholders at the Vickers annual meeting expressed their discontent with the sale of Rolls-Royce Motor Cars to a mass-market manufacturer, citing concerns about the devaluation of the brand.

Statistics:

£340m: The agreed cash purchase price for Rolls-Royce Motor Cars from Vickers to BMW with additional value for stocks and ongoing contracts.
£400m: Potential value of the bid from Volkswagen, depending on the inclusion of the Cosworth engines arm or other Vickers activities.
£500m: The upper limit of Volkswagen's bid to acquire Rolls-Royce Motor Cars.
£197m: Amount that Vickers plans to return to shareholders if the sale to BMW is approved.
Early June: Scheduled date for Vickers shareholders to approve the sale of Rolls-Royce Motor Cars to BMW.
1970s: Early on, when the agreement was drawn up in which Rolls-Royce plc allows to veto a foreign owner.

Sources:

"VW to counter £340m bid with £500m Vickers tried to slam the door on Volkswagen yesterday..." (The Times, 1998)