Authors: Tom Donnelly, David Morris, Kamel Mellahi
Addresses: Coventry Business School, Coventry University, Priory St, Coventry, UK ' Coventry Business School, Coventry University, Priory St, Coventry, UK. ' Coventry Business School, Coventry University, Priory St, Coventry, UK
Abstract: This paper discusses the reasons why the German luxury car maker BMW purchased the ailing British volume car producer Rover/Land Rover and why it disposed of both after only six years. This merger went against the trend in the industry as normally it was volume producers that acquired luxury brands, but being vulnerable to potential predators, BMW sought size. The paper demonstrates how BMW failed to turn its UK protege round to the extent that Rover|s downwards spiral was thought to threaten BMW|s own long-term viability. The end result was that, under severe pressure from BMW|s main directors, the company sold off its British subsidiaries with Rover being sold to Phoenix and Land Rover to Ford.
Keywords: globalisation; merger; post merger management policy; product development; currency fluctuations; divestment; automobile industry; BMW; Rover; Land Rover.
International Journal of Business Performance Management, 2003 Vol.5 No.4, pp.302 - 315
Published online: 10 May 2004 *Full-text access for editors Access for subscribers Purchase this article Comment on this article