GM Acquires Majority Interest in Lotus

General Motors, seeking to improve its image and know-how, said Wednesday that it has acquired a majority interest in Lotus, one of the most revered names in automotive racing and engineering.

GM said that it paid about $20 million, or $1.82 a share, for 59.7% of Group Lotus PLC shares and that it intends to buy the whole company at the same per-share price.

The biggest holdout is Toyota Motor of Japan, which owns 22%. Telephone queries to Toyota’s U.S. subsidiary in Torrance were not returned.

With about 600 employees, Hethel, England-based Lotus, founded in 1958 by the late Grand Prix racing legend Colin Chapman, is small. Its primary work is in engineering, although it does manufacture and market a limited number of high-performance cars.

The price was puny by the standards of the world’s largest auto maker, which has annual revenue estimated at $100 billion. But industry analysts said GM could find the Lotus name and talent invaluable in producing performance cars that lift the company’s image.

“Lotus has the kind of talent that you can’t grow overnight internally,” said Arthur Davis, automotive industry analyst for Prescott, Ball & Turben in Cleveland.

Most Lotus employees are engineers and technicians. Team Lotus, the Grand Prix racing organization, long has been financially separate from the car company and wasn’t involved in the transaction.

The three major sellers of Lotus stock were British Car Auction Group PLC, J. C. Bamford Investments Ltd. and Schroeder Investments, GM said. Their shares totaled 58%, GM said, while refusing to give a breakdown. Shares held by Lotus directors, totaling 1.7%, also were sold to GM.

GM spokesman Clifford Merriott declined to say if Chapman’s widow, Hazel, sold her stake, which is understood to be about 8% of the company.