Volkswagen to Intensify Bid Battle for Rolls-Royce with Enhanced Offer

Strategic Insights -

Volkswagen is preparing to strengthen its bid for Rolls-Royce, with a potential offer of up to £500m, surpassing the £340m bid from rival suitor BMW. The decision followed a meeting of Volkswagen's supervisory board in Germany, where executives sanctioned the strategy of Ferdinand Piech, the board's chairman. Volkswagen's offer includes the Cosworth engines business and would provide more generous terms than BMW's, such as maintaining a British management team and managing Rolls and Bentley brands separately.

Key Takeaways:

  • Volkswagen's supervisory board has sanctioned a strategy to increase its bid for Rolls-Royce, with an offer potentially reaching £500m.
  • The enhanced offer includes the acquisition of the Cosworth engines business, a separate management structure for Rolls and Bentley brands, and an increase in production to 10,000 units a year.
  • Volkswagen has announced plans to invest up to £2bn in the product range over the next decade.
  • If Volkswagen's negotiations fail, the supervisory board is considering developing its own line of luxury limousines by reviving the old names of Horch and Bugatti.
  • Rolls-Royce has received 350 orders for the Silver Seraph and 100 orders for the Bentley Arnage, with demand exceeding expectations.

Statistics:

  • Volkswagen's net profits doubled to DM345m (£119m) in the first quarter of the year.
  • Production of the VW group rose 11% to 1.153 million units, while sales increased by 23% to DM33bn.
  • Asian deliveries declined by 15.6% due to Far Eastern economic turmoil.
  • Rolls-Royce has received 350 orders for the Silver Seraph and 100 orders for the Bentley Arnage.

Sources:

  • "Volkswagen is expected to intensify..." - The Times (Date not specified)
  • Interview with Graham Morris, Rolls-Royce's chief executive - The Times (Date not specified)
  • Volkswagen's quarterly financial report - Volkswagen Group (Date not specified)