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To: JoAnn who wrote (52289)	2/5/1999 12:22:00 AM
From: JoAnn	Respond to of 119973

GM and BMW -- Thursday February 4, 11:06 pm Eastern Time GM denies rumored talks with BMW By Michael Ellis DETROIT, Feb 4 (Reuters) - General Motors Corp. (NYSE:GM - news) denied rumors it was in talks to buy Germany's BMW AG amid speculation that Europe's last independent luxury automotive brand would be the latest takeover target in the industry. Following Ford Motor Co.'s (NYSE:F - news) takeover last week of the premium car operations of Sweden's AB Volvo , BMW has moved to center stage as speculation mounts about another deal in the works for the consolidating automotive industry. ''There have been no discussions with BMW management,'' GM spokesman Kenneth Levy told Reuters. Levy said the Belgian newspaper report that sparked the latest flurry of rumors misquoted Michael Burns, the president of GM's European operations. Asked by La Libre Belgique what other carmakers GM might be interested in, Burns was quoted saying: "In a speculative way, I'd mention the BMW group. They operate in the same superior luxury segment in which we are weaker. ''BMW would be the ideal partner, allowing us to increase our presence on the market just above Saab's,'' Burns added, according to the newspaper. Levy said that, according to a transcript from a recording of the interview, Burns said some automakers would be a good fit with GM, but he declined to speculate on rumors. Most automakers have scrambled to find partners to compete on a global scale on the heels of the DaimlerChrysler AG (NYSE:DCX - news) (quote from Yahoo! UK & Ireland: DCXGn.F) deal last year. But BMW's controlling shareholders, the Quandt family, has rebuffed rumored interest from Fiat SpA , Volkswagen AG (quote from Yahoo! UK & Ireland: VOWG.F) and Ford in recent months. Last year, Quandt family matriarch Johanna and her children reorganized their holdings in BMW to make it more difficult for any one of them to sell their share, analysts said. Despite their reluctance to sell, analysts note that the Quandt family, which bought 30 percent of an ailing BMW in 1960, does not have the familial ties to the company that the Ford family has with its namesake in Detroit. ''BMW is a peach of a brand,'' said AutoPacific analyst Jim Hall, who doesn't believe the Quandts will sell. ''Foreign ownership would dilute that.'' BMW is in a stronger position than many Asian automakers looking for a partner to help overcome high debt, weak market share and overcapacity. The Munich-based automaker, which is far smaller than European rivals Volkswagen AG (quote from Yahoo! UK & Ireland: VOWG.F), Renault SA and Peugeot Citroen could instead pursue other avenues to compete against larger automakers, he said. Rather than mergers and acquisitions, BMW and other car manufacturers could share vehicle platforms, research and development costs and combine material purchasing agreements, analysts said. Ford Chief Executive Jac Nasser has also said the industry could consolidate through joint ventures and alliances that stop short of a outright acquisition. ''There are other business arrangements that could still allow you to survive into the coming millennium,'' Hall said. ''It seems that, right now, nobody's come up with what they are.'' Automakers interested in BMW instead turned to Volvo, with Ford the apparent winner over Italy's Fiat SpA , whose higher bid was rejected by Volvo management. But a merger between Volvo and Renault more than five years ago was scuttled at the last minute by prominent Swedish shareholders. GM, meanwhile, could bulk up its high-end line of cars by exercising an option available later this year to buy the remaining 50 percent of Saab it does not own. -------------------------------------------------------------------------------- More Quotes and News: DaimlerChrysler AG (NYSE:DCX - news) Ford Motor Co (NYSE:F - news) General Motors Corp (NYSE:GM - news) Related News Categories: US Market News --------------------------------------------------------------------------------