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http://cnnfn.com/2000/03/16/europe/rover/
NEW YORK (CNNfn) - Ford Motor Co. has agreed to buy the profitable Land
Rover sport utility division of Germany's BMW for 3 billion euros ($2.9
billion), sources close to the matter said Thursday, as the world's No. 2
car maker adds another luxury name to its stable of prestigious brands.
BMW had already scheduled a news conference Friday to detail plans,
announced Thursday, to sell its loss-making Rover Cars unit to the British
venture capital firm Alchemy Partners. Sources said an announcement of deal
with Ford would also come Friday.
The deals mark a hasty retreat of BMW from Rover business, which had
been faulted as a drag on the Munich-based luxury auto maker's earnings. The
Land Rover division has been profitable, while the Rover Cars unit, first
seen as a key entree for BMW into the mid-range car market, lost money
despite support from the British government to keep the line alive.
Ford has been bulking up in Europe's luxury car market, after buying the
car business of Sweden's Volvo for about $6.5 billion about a year ago.
As part of its Alchemy deal, BMW said it will take a charge of 3.15
billion euros ($3 billion) to exit the business, which will drive BMW into a
loss of 2.5 billion euros for 1999. BMW didn't provide financial details of
the deal but experts speculated BMW will pay Alchemy to take control of
Rover.
A spokesman for BMW declined to confirm or deny that the company is
seeking to sell Land Rover. A Ford spokesman also declined to comment.
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