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Split to cost BMW £1.9bn

BMW's disposal of Rover Group has triggered intense speculation about acquisitions and partnerships as leading manufacturers hunt the most valuable brands.

Ford, General Motors, Volkswagen and DaimlerChrysler are all seen as predators for BMW, still a powerful global brand despite its disastrous Rover strategy.

On Tuesday, BMW revealed Rover last year lost £736m, a rise of 26% on 1998, while the BMW brand made a profit of just over £400m. But huge provision for the Rover break-up plunged BMW into a £1.52bn loss. The results put the cost of the Rover break-up at £1.9bn.

General Motors is thought to be preparing for an attempt to wrest Land Rover from the grasp of Ford, which agreed to pay BMW £1.8bn. GM president Richard Wagoner is believed to have held a private meeting with members of the Quandt family at this month's Geneva motor show.

With their large shareholding in BMW, the Quandts hold the key to its future. BMW chairman Joachim Milberg was appointed with the Quandts' support after the resignation of Bernd Pischetsrieder. Business speculation in Germany this week suggests he might be losing the family's total confidence.

Ford Premier Automotive Group chairman Wolfgang Reitzle was quoted in a German magazine as saying he had agreed with BMW that the two groups should combine to develop the replacement for the Land Rover range.

Weakened by the collapse of its ambitions for Rover, BMW is now vulnerable in the medium term with its annual production well under the 2m 'comfort zone'. Chief executive Jac Nasser's agreement to do a 4x4 joint venture with BMW looks like a manoeuvre to position Ford for a take-over bid.



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