NEW YORK (CNNfn) - Scoring a surprising coup, Volkswagen AG on Thursday snatched control of luxury British carmaker Rolls-Royce Plc after its $705 million (430 million British pounds) bid topped an offer from fellow German automaker BMW.
Current Rolls-Royce owner Vickers Plc announced the deal Thursday afternoon.
VW's bid beat a rival $557 million (340 million British pounds) offer from BMW, which appeared to have won Rolls-Royce until late last month when Volkswagen began making overtures to Vickers.
Volkswagen said with the exception of the increased bid, the terms of its offer largely mirrored those of BMW. BMW had said it would triple Rolls-Royce's annual production from a current level of about 2,000 cars.
The agreement must still be approved by Vickers shareholders who are set to take up the deal at a meeting June 4. In addition to clearing the sale to Volkswagen, they must also approve the termination of the previous deal with BMW.
Rolls Royce designs, manufactures and sells luxury motor cars under the Rolls-Royce and Bentley marques. In 1997, the units posted sales of $507.8 million and a before-interest profit of $44.1 million.