The takeover of Rover Group Ltd. by BMW AG

The takeover of Rover Group Ltd. by BMW AG

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Inhaltsangabe:Abstract: The target of this case study is to present and analyse the drastic false estimations made by BMW in planning and realising the Rover transition as well as its consequences. The worked out mistakes should be generalized in order to give opportunities of their avoidance for future MaA cases. After working out the MaA basics in the 1st chapter, the 2nd chapter deals with the reasons of BMW Management to buy another international manufacturer and gives a clue why the choice fell just on Rover. It opens with an overview of the economic development during the 6 years time period of the Rover takeover. After this, the economic and political environment is shown, also the market situation in the automobile segment in the year of the takeover, followed by the business course and goals of BMW as well as their alternatives. This chapter closes with the strategy and enterprise philosophy of BMW and with a list of the of the Rover Group s assets in 1994. In the 3rd and 4th chapters of this case study the mistakes of the BMW management attempting to integrate Rover into the BMW portfolio are shown and analysed, as well as its consequences for BMW and Rover. The 5th chapter will end with the conclusion, why the Rover takeover went wrong. Zusammenfassung: Ziel der Arbeit ist es, die strategischen Ziele, die Tragweite und die mApglichen Folgen von MaA-Transaktionen in den Bereichen Finanzen (Investitionen und operatives GeschAcft), UnternehmensfA¼hrung- und Organisation sowie der Unternehmenskultur anhand dieses Unternehmenskaufes zu untersuchen. Dazu wurde die Arbeit in 6 Teile untergliedert. Im 1. Teil werden die allgemeinen MaA-Grundlagen beleuchtet, insbesondere die Ziele, Erscheinungsformen, rechtlichen Rahmenbedingungen als auch die Vor- und Nachteile von MaA-Transaktionen. Im 2. Teil wird das Umfeld von BMW im Jahre 1994 analysiert, die strategischen GestaltungsmApglichkeiten dargestellt und untersucht, warum gerade die britische Rover Group der fA¼r BMW geeignete Aœbernahmekandidat zu sein schien. Im 3. und 4. Teil wird die Transaktion und ihre Folgephasen untersucht und die GrA¼nde fA¼r das Scheitern der Aœbernahme herausgearbeitet. Die Zusammenfassung und kritische Bewertung der dem BMW Vorstand unterlaufenen Entscheidungsfehler bei der Auswahl und FA¼hrung von Rover erfolgt im 5. Teil. Die Arbeit schlieAŸt ab mit dem 6. Teil, in dem die finanziellen Auswirkungen der Transaktion kommentiert und anhand von 10 SAculen- und Liniendiagrammen erlAcutert werden. Inhaltsverzeichnis:Table of Contents: 1.Introduction - Mergers a Acquisitions (MaA)5 1.1Goals of MaA5 1.1.1Economies of scale5 1.1.2Economies of scope6 1.1.3Reduction of economical risks6 1.2Typical achievements of economies of scope7 1.2.1Research and development area7 1.2.2Sourcing7 1.2.3Finance7 1.2.4Production7 1.2.5Distribution8 1.3Legal problems of MaA8 1.4Features of MaA9 1.4.1Production level9 mergers9 mergers9 mergers9 1.4.2Duration9 1.4.3Degree of cooperation10 basis of cooperation10 acquisitions10 of assets items10 1.4.4Forms of MaA10 cooperation and coordinated behaviour11 and participation11 associations11 venture11 1.5Distinction of national, international and multinational companies12 1.5.1Location categories12 setting12 setting12 location12 location12 location13 1.5.2Advantages of international / multinational companies13 1.5.3Problems of international / multinational companies13 1.6Recognizable trends in MaA14 1.7Reasons for the increase of MaA15 1.8The acquisition of companies16 1.9Purchases of companies16 1.10Lines of business effected by MaA16 1.11Frequent faults and omissions made in MaA17 2.BMW merges Rover18 2.1Questions and targets of this case study18 2.2BMW Group in numeral figures from 1994 to 199918 2.3Historical background of the Rover takeover20 2.4Economical and political environment in the years 1993 / 9420 2.5The automotive segment in 1993 / 9422 2.6Business figures of BMW in 1993 / 9423 2.7BMW's options and goals in the years 1993 / 9423 2.8Reasons and visions for BMW's Rover Investment in 199324 3.Make Or Break - The Rover Group before the takeover26 3.1Goals and strategies27 3.2Difficulties before, during and after the acquisition28 3.3The Rover Group30 3.4A long way of challenges32 3.5Clash of interests34 3.6The Rover breakdown37 3.7Culture contradictions39 3.8High stakes41 4.Results and conclusions44 4.1Running out of options48 4.2One final attempt50 4.3No end in sight55 4.4The final twist57 5.Final Conclusion65 6.Attachment - Financial figures and statistics67 6.1The BMW shares67 6.2BMW Group Investments a Cash flow from 1994 till 199969 6.3Deliveries BMW Automobiles / Rover Automobiles from 1994 till 199971 6.4Sales BMW Group / Sales Rover Group73 6.5Exchange rates of major currencies against the DM from 1994 to 199974 Bibliography75In terms of manufacturing - discipline, attention to detail, and production quality a€“ Rover cars had learned a lot from the Japanese. But for BMW the ... be easy to bridge. So, BMW found that it had bought a company with deep-seated problems.

Title:The takeover of Rover Group Ltd. by BMW AG
Author:Johannes-Cornelius Adari, Henrik Thrane, Pascale Taube - 2004-08-10


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