NEW YORK TIMES
The British Government announced today that it was selling the Rover Group P.L.C., the ailing car maker, to British Aerospace P.L.C. for £150 million, or about $279 million – well below the price that analysts had expected.
The Trade and Industry Secretary, Lord Young, told Parliament that a conditional agreement for the sale included a cash infusion by the Government of about $1.49 billion to enable the company to enter private ownership in a ”fit state.”
Lord Young said that the sale of its 99.8 percent stake in Rover was ”the deal of the decade for the Government,” but the terms were sharply attacked by political critics. ”The Government is paying British Aerospace to take Rover off its hands,” said Lord Williams, a Labour spokesman in the House of Lords. Rover was known as British Leyland P.L.C. when it was nationalized in 1975 to save it from collapse.
Successive governments have pumped almost $5.58 billion into the company to keep it going. Meanwhile, the European Community’s executive commission said today that it would investigate the sale because of concerns that the write-off could amount to a subsidy that would give Rover an unfair advantage in European markets.