Land Rover Sale Finally Agreed

When BMW decided to disassociate itself from Rover, one of the first deals to be announced was the sale of the prestigious Land Rover marque to Ford, for the sum of 3 bn Euros. It seemed a marriage made in heaven – BMW was developing its own 4×4 product line and Ford wanted a flagship 4×4 brand – and yet the whole deal was thrown into doubt. The sticking point seemed to be a request by Ford to defer one third of the payment for up to five years, but this has now been sorted out, with an announcement that both parties have agreed a deal.

Ford would appear to have got its own way, as a condition of the deal is that 1 bn Euros will not be paid until the year 2005. Joachim Milberg, BMW Chairman, has described the deal as one that would ensure BMW’s profitability and independence. The deal gives Ford 13,000 extra employees at the Solihull factory and the R&D facility at Gaydon in the Midlands.

BMW’s links with Land Rover will not be completely severed, as the company will supply components, including engines, to Land Rover. Jac Nasser, Ford’s President, would not rule out possible job losses, but he revealed that Ford intended to maximise the potential for Land Rover sales in the USA. At present, only around 30,000 Land Rovers are sold in that country.