On This Day

Monday 30th March 1998

22 years ago

German automaker BMW bought Rolls-Royce for $570 million. But the deal was not smooth and has a very interesting story behind it. In 1998, owners Vickers decided to sell Rolls-Royce Motors. The most likely buyer was BMW, who already supplied engines and other components for Rolls-Royce and Bentley cars, but BMW's final offer of £340m was beaten by Volkswagen's £430m. A stipulation in the ownership documents of Rolls-Royce dictated that Rolls-Royce plc, the aero-engine maker would retain certain essential trademarks (the Rolls-Royce name and logo) if the automotive division was sold. Rolls-Royce plc chose to license not to VW but to BMW, with whom it had recently had joint business ventures. VW had bought rights to the "Spirit of Ecstasy" bonnet (hood) ornament and the shape of the radiator grille, but it lacked rights to the Rolls-Royce name necessary to build the cars. Likewise, BMW lacked rights to the grille and mascot. BMW bought an option on the trademarks, licensing the name and "RR" logo for £40 million, a deal that many commentators thought was a bargain for possibly the most valuable property in the deal. VW claimed that it had only really wanted Bentley anyway. BMW and VW arrived at a solution. From 1998 to 2002 BMW would continue to supply engines for the cars and would allow use of the names, but this would cease on 1 January 2003. From that date, only BMW would be able to name cars "Rolls-Royce", and VW's former Rolls-Royce/Bentley division would build only cars called "Bentley". The Rolls-Royce's Corniche ceased production in 2002.