The future of Rover Cars, one of the most famous names in the British motor industry, was sealed during a series of secret management meetings in Munich in the past three weeks.
After five years of struggling to revive Rover, BMW's senior directors abandoned their previous commitment to Rover by agreeing in principle to a takeover bid from an unexpected source - an upstart British venture capital group with no record in the car industry.
The approach will be formally unveiled today during press conferences in London and Munich.
Most of the attention is expected to focus on the Royal Society of Arts in London, where Mr Jon Moulton, managing director of Alchemy Partners, will reveal his strategy for the future of Rover.
The takeover follows more than six months of fraught negotiations, dubbed Project Crufts by Alchemy because the deal was expected to coincide with the dog show.
It involved BMW's withdrawal from Rover Cars, handing the assets, sales network and brands of Rover, "old Mini" and MG to a new entrant in the automotive industry.
Mr Moulton admits it is the most dramatic deal he has ever entered. "I never celebrate until it is completed. I will tell you if it is the most exciting in a few weeks," he said last night.
The negotiations came to a head this week. During a series of emergency meetings, BMW's directors decided to abandon previous commitments to Rover Cars and its huge Longbridge plant by selling the brand and its assets to Alchemy.
At the Munich headquarters of BMW, by comparison, there was a tangible sense of relief. "We are free for the future and now we can concentrate on new projects," said a senior director. The deal strengthens the power base of Prof Joachim Milberg, who was appointed BMW chairman last year following a previous management split over Rover's strategy.
In spite of public statements to the contrary, he opted to cut BMW's losses by withdrawing from Rover while retaining the famous Mini marque. The profitable Land Rover division would be put up for sale.
People familiar with the situation said the deal followed contacts with "a number of venture capitalists" over several months. But news that three board members were resigning as part of the "re-orientation" suggested that support for the plan was not unanimous.
The departure of Mr Henrich Heitmann, BMW's head of sales and marketing; Mr Wolfgang Ziebart, development director, and Mr Carl-Peter Forster, head of production and engineering, indicated that Prof Milberg was moving quickly to squash any dissent within the board.
BMW tried to portray their removal as "differences of style rather than strategy". But some observers were reluctant to accept that version of events.
People close to the supervisory board claimed that Mr Heitmann and his colleagues favoured a more radical solution, involving the closure of Longbridge and Rover Cars. They believed it would have been less costly than backing the Britain.
Prof Milberg disagreed vehemently and won the support of the Quandt family, the secretive German industrial dynasty and BMW's majority shareholders, for his stand. The infighting and political manoeuvring in the corridors of BMW, however, is a distraction for the Rover workforce and investors in Alchemy. They are pressing Mr Moulton to give details of the new management team and strategy for the business. The number of employees destined to retain their jobs and plans for the Rover and MG brands all need explaining in greater detail.
Officials close to the situation suggest that only about half of the 7,500 Rover employees in the UK are likely to retain their jobs under the new management. The drawn-out negotiations focused heavily on the pricing structure of the deal. In return for paying up to £50 million sterling (€81 million) for the Rover assets, Alchemy has placed a net book value of £1 billion sterling on the group's assets and brands.
Given the 6 billion-7 billion deutschmark (€3E3.6 billion) investment BMW has made in Rover Group since 1994 and yesterday's €3.15 billion writedown, it looks like a very cheap deal.
But BMW executives have taken a different view of Project Crufts. "This is a business where we saw no prospect of returning to profit. Now we can look to fresh horizons."
