London-based venture capitalist company Alchemy is to take over the Rover
motor company in a dramatic £2 billion deal, it was announced today.
Rover's owners, BMW of Germany, said negotiations had started for the sale of
the Rover and MG brands, as well as its production facilities at Longbridge,
Birmingham to Alchemy Partners.
BMW will continue to supply Alchemy with the Rover 75, produced at Cowley in
Oxford, on the basis of a "job contract".
The disposal of Rover and MG is costing BMW 3.15 billion euros (nearly £2
billion), BMW said.
Investment for production of the new Mini at Longbridge is being stopped and
the model will instead be produced by BMW at Cowley, ready for launch in
early summer 2001, said BMW.
The news of the Alchemy deal followed a meeting in Munich of BMW's
supervisory board.
BMW, which took over loss-making Rover in 1995, said it would complete
building its new engine plant in Hams Hall in the Midlands, which will begin
operations as planned.
The company added that plans for the location of a new Rolls-Royce plant in
the UK to produce an all-new model from 2003 were unchanged.
BMW chairman Professor Joachim Milberg said in the statement that the Rover
turnaround by BMW had been "successful", but had been undermined by the
strength of the pound.
Alchemy, which is to call the new business the MG Car Company, confirmed the
acquisition in a brief statement issued at lunchtime today.
It read: "Alchemy is pleased to announce the impending launch of the MG Car
Company following today's outline agreement with BMW to acquire Rover Group.
"The new company will continue with Rover's current model range of the 25,
45, 75 and old Mini and will provide on-going services to Rover customers.
"The new company will focus on development of a state-of-the-art
British-built product range worthy of the sporting heritage of the MG name."
Longbridge has been producing the 25 and 45 and was due to launch the
millennium Mini later this year. The 75 is produced at Cowley.
Sir Ken Jackson, general secretary of engineering union the AEEU said:
"Alchemy will have to demonstrate their commitment to the loyal workforce.
The next stage is to sit down with Alchemy to discuss their proposals."
Sir Ken said the last few years had "shattered" the confidence of the Rover
workers and Alchemy would have to restore the trust that had been lost.
He added: "I am certain the Government will offer the new owners the
financial support they will need and we will play our part in this
partnership."
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All I can say to this news is:
Alchemy will have to employ all the skills of Merlin himself, if they are to
make this work.
Léon
Triumph Sports Six Club
International Liaison Secretary
1963 Triumph Vitesse 2-Litre Convertible
Wimbledon, London, England.
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