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BMW enters Rolls derby
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March 27, 1998: 8:26 a.m. ET
German automaker looks to overtake Volkswagen in race for Rolls-Royce
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NEW YORK (CNNfn) - Germany's Bayerische Motoren Werke AG (BMW) shifted into high gear Friday with a bid for Rolls-Royce Motor Cars it hopes will leave Volkswagen AG in the dust.
Rolls-Royce, a car manufacturer which also makes Bentley luxury autos, was put up for sale last October by its parent, British engineering firm Vickers Plc. At the time, Vickers said it wanted to concentrate on its defense units. The company already has sold off its medical businesses.
A BMW spokesman said Friday that, as expected, the German automaker wants to buy Rolls. "Our offer is out," he said, without elaborating on the bid.
On Tuesday, its German rival, Volkswagen issued its offer, but also did not reveal the value of its bid. "I can say it is in line with what the selling party has offered," VW Chairman Ferdinand Piech said at a news conference on Wednesday. Auto analysts estimated VW wants to pay $823 million.
 
BMW has said in the past it wanted to buy the luxury car maker, but has cautioned it didn't want to get pushed into a position where it endangered its own finances to purchase Rolls.
While the race for Rolls is essentially wide open, BMW is not without some advantages under the hood. BMW makes the engines used for Rolls Royces and has said it would halt its supplies if another firm won the Rolls derby.
That threat has already driven off one potential buyer, Mayflower Plc. The British auto parts maker pulled over to the side in November after mulling a bid to buy all of Vickers.
For its part, Vickers has sought to minimize BMW's threat, saying that it has a contract with BMW to supply the engines for two years and, during that time, another engine supplier could be found. However, rival bidders may not want to deal with a possible production breakdown in the near future.
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