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Rolls-Royce Motors was created from the demerger of the Rolls-Royce car business from Rolls-Royce Limited in 1973. Rolls-Royce Limited had been nationalised in 1971 due to the financial collapse of the company caused in part by the development of the RB211 jet engine. In 1973 the British government sold the Rolls-Royce car business to allow Rolls-Royce Limited to concentrate on jet engine manufacture.
In 1980 Rolls-Royce Motors was acquired by Vickers. In 1998 Vickers decided to sell Rolls-Royce Motors. The leading contender seemed to be BMW, who already supplied engines and other components for Rolls-Royce and Bentley cars. However their final offer of £340m was outbid by Volkswagen, who offered £430m.
However Rolls-Royce plc, the aero-engine maker, decided it would license certain essential trademarks (the Rolls-Royce name and logo) not to VW, but to BMW, with whom it had recently had joint business ventures. VW had bought rights to the "Spirit of Ecstasy" mascot and the shape of the radiator grille, but it lacked rights to the Rolls-Royce name in order to build the cars. Likewise, BMW lacked rights to the grille and mascot. BMW bought an option on the trademarks, licensing the name and "RR" logo for £40m, a deal that many commentators thought was a bargain for possibly the most valuable property in the deal. VW claimed that it had only really wanted Bentley anyway, and in sales terms this was the stronger brand, with Bentley models out-selling the equivalent Rolls Royce by around two to one.