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MG Rover parts business sold

Caterpillar Logistics Services (UK), a wholly owned subsidiary of Caterpillar Inc, and Phoenix Venture Holdings Limited have reached an agreement for Cat Logistics to acquire the parts business of MG Rover, a wholly owned subsidiary of PVH.

The value of the transaction is in excess of £100 million, with an ongoing profit sharing agreement.

Cat Logistics will acquire MG Rover's parts business, which includes the sourcing, marketing, distribution and sale of automotive service parts and accessories to MG Rover dealers, distributors, importers and other related customers worldwide. Since 2001, Cat Logistics has managed these activities on behalf of MG Rover from its base in Desford, Leicestershire, UK. Cat Logistics currently supports an existing MG Rover vehicle population of more than 2.5 million.

PVH has an option to buy back MG Rover's parts business in four to five years.

Kevin Howe, group chief executive of Phoenix Venture Holdings says: "This deal provides valuable resources which will be invested in our core business, the MG Rover Group ahead of the strategic relationship with Shanghai Automotive taking effect. With experience and capability built up over many years Cat Logistics is extremely well placed to continue to provide best in class service to MG Rover dealers, distributors and importers worldwide."

Completion of this agreement is subject to regulatory approval. Current operations at the Cat Logistics Desford, UK MG Rover parts distribution facility will continue, with all 390 employees remaining with Cat Logistics, and all current employees of MG Rover's parts business provided with the opportunity to transition to Cat Logistics.

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