LOMBARD Motor Finance has agreed to buy British Car Contracts, but has ruled out a complete merger with Lex Vehicle Leasing in which it already has a 50% stake. But it admits it is looking to create synergies between the UK's two largest contract hire companies when it completes the purchase in April for an undisclosed sum.

Lombard said it is 'considering all options' after agreeing the purchase of Rover's half of BCC to add to its own 50% stake. Both BCC and Lex Vehicle Leasing have set up project groups to investigate possible synergies between the two companies.

Lombard Motor Finance managing director Howard Lago said joint purchasing of vehicles to maximise buying power was an option, but ruled out redundancies as a result of merging administrative functions. Robert Mercer, managing director of BCC declined to comment, but in a letter to key customers and suppliers, said: 'Lombard will be seeking to identify synergies between British Car Contracts and Lex Vehicle Leasing to improve the sales performance and service levels from both businesses. There will be no changes in our method of operation in the immediate future.'