BMW And Volkswagen Battle Over Rolls Royce

It is not uncommon in the world of big business for one company to consume another company. Often it is done to acquire assets that the first company is in need of. Many times it is done so that the larger company can establish a foothold in a new or emerging marketplace. There are times it even happens so that the larger company’s assets are more diversified. And it can even happen at times as a defensive move so that the larger company is less attractive to another company looking to take it over. Whatever the reason for the takeover, when it happens it usually changes the entire look and feel of the company that has been taken over. Sometimes business deals like these are complicated when there are two larger companies trying to buy one smaller company, that is exactly what happened when both Volkswagen and BMW set their eyes on Rolls Royce.

BMW’s ties to Rolls Royce stretch back to the early 1990’s when the two companies teamed up to see two Rolls Royce models (the Silver Seraph and the Bentley Arnage make use of BMW engines. It was this early work together that laid the groundwork for BMW’s desires to eventually acquire the Rolls Royce company. It wasn’t until 1998 that BMW would take the first step of acquisition of Rolls Royce, unfortunately by that time Volkswagen had also entered the picture as a suitor of the world famous luxury car maker.

The early leader in the bidding for the Rolls Royce company was BMW, however they were later outbid for the company by Volkswagen who would eventually complete the purchase in late 1998. Volkswagen celebrated its victory over BMW, but BMW still had plan B available to them. When Volkswagen had completed negotiations it had acquired two important symbols of the Rolls Royce company, the uniquely shaped radiator grille and the “Spirit of Ecstasy” mascot. These are two world famous symbols of the Rolls Royce company and without them it would be difficult to continue marketing vehicles to Rolls Royce enthusiasts every where. The one thing that Volkswagen failed to purchase in the takeover? The rights to use the Rolls Royce name.

Rolls-Royce plc is an aero-engine manufacturing business that owns the rights to the name Rolls Royce. Unfortunately for Volkswagen, the aero-engine maker already had a working business partnership with BMW. Through a deal struck between the two companies, BMW reached a financial agreement in 1998 that allowed them to acquire the rights to both the name Rolls-Royce and the famous “RR” logo for use on automobiles.

At this point then, Volkswagen had acquired the Rolls Royce company and BMW had acquired the Rolls Royce name. Seeing that they were at an impasse, the companies fell into negotiations that ended with Volkswagen gaining the right to use the Rolls Royce name until the year 2003. But after 2003 BMW would gain the rights to use the grille and mascot from 2003 onwards.

When everything shook out following 2003, BMW had built a new factory to produce the much sought after Rolls Royce models, including the exciting new Rolls Royce Phantom, while Volkswagen concentrated on the other property gained in the original Rolls Royce purchase, the Bentley line of cars. Two large car companies had competed against each other in 1998 in a battle over specialty car maker Rolls Royce. At first it appeared that Volkswagen had dealth BMW a knockout blow, but in the end due to luck and insightful negotiating BMW had fought back to end the battle with what was essentially a draw. A very interesting episode in automotive manufacturing history, the likes that may never be seen again.

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