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BMW AG – THE ROVER COMPANY

Why did BMW AG acquired the Rover company ?

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What does M&A mean ? A merger is combination of two companies to

from new company. Acquisition is the purchase of one company by

another in which no new company is formed. (Investopedia)

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About Companies BMW AG is a German automobile manufacturing founded in 1916. The

company began life as a aircraft engine company in the early 1900s. The first BMW car Dixi sucessfully produced between 1928-1930.

BMW is headquartered in Munich,Germany.

BMW DİXİ

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The Rover Company was a British car manufactring company founded in 1878 as Starley & Sutton Co. Company products include bicycles and motorbikes. It produced its first car in 1904.

Rover is headquartered in Whitley,Coventry, UK

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Goal of Acquisition In fact we will see two main goal for this

acquisition;

The first major factor BMW want to expand it own market. But market had very limited for sold own car. And BMW’s executive described acquisition another company.

The another factor is British car manufacturing sector have low level of cost if we compared German car manufacturing sector.

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BMW acquired the Rover Company in 1994 $1.35 Billion.

The problems had began immediately; BMW want to expand its own market and Rover’s executive

prefered ‘’ we must select specific price fields in market and also we must seperate automobile market by geographic region.’’

THE ACQUISITION

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Another important problem for this deal linguistic differences between two companies.

This problem created lack of communication problem and also delayed the integration in process.

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Analysis The acquisition wasn’t succesfully because

both of company didn’t have same strategic plan for entire market . Each company tried to pursue their policy. In additional to both of company didn’t speak same language in the process. The most important problem for acquisition.

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