The speed of the deal - which is expected to be formally approved by Vickers shareholders at the company's annual meeting on April 29 - surprised the motor industry. It came just a few days after Volkswagen, understood to be BMW's chief rivals for the marque, tabled a deal believed to around £400 million.
BMW has been the favourite to buy the company as it supplies engines for the new Rolls-Royce Silver Seraph, launched at last month's Geneva Motor Show. The deal follows BMW's acquisition of Rover Group for £800 million four years ago. BMW had already promised that if it was successful in buying Rolls-Royce it would not move production of the vehicles outside of the UK.