Archive : Rover Acquisition Is Resconsidered
British Aerospace P.L.C. said today that it would reconsider its takeover bid for Rover Group P.L.C. after the European Community ordered a large cut in the British Government’s planned cash injection into the state-owned auto maker. British Aerospace has agreed to acquire the British Government’s 99.8 percent stake in Rover for $:150 million, or about $254 million. The Government has said it would inject $:800 million, or about $1.35 billion, into Rover to reduce the auto maker’s debt.
But the European Community’s Executive Commission, which has the power to block deals that it considers harmful to competition in the 12-nation trading bloc, said British aid of $:469 million would be acceptable. Because some regional aid also would be allowed, the Government subsidy would be reduced, in effect, to $:547 million, the British Trade Secretary, Lord Young, said. British Aerospace said it had requested more time to consider its proposed takeover in light of the commission’s decision.
British Aerospace also said trading in its shares, which was halted earlier today pending the community’s announcement, would remain suspended. Negotiations between the Government and British Aerospace were continuing.
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