News - Jaguar
Ford ready to say Tata to Jaguar and Land Rover
Indian carmaker officially named as likely buyer of British motoring icons
4 Jan 2008
TATA has emerged as the clear preferred buyer of Jaguar and Land Rover after Ford yesterday officially confirmed that it is pursuing negotiations with the Indian carmaker.
This latest development is seen as a blow for the other two known contenders – another Indian carmaker, Mahindra, and an American investment group called One Equity Partners that is headed by Australian Jac Nasser, a former Ford CEO.
Ford of Europe and Premier Automotive Group executive vice president Lewis Booth, who is chairman of both Jaguar and Land Rover, issued the statement confirming Tata Motors as the front-runner for the long-rumoured buy-out of the iconic British brands.
“Ford is committed to focused negotiations at a more detailed level with Tata Motors concerning the potential sale of the combined Jaguar Land Rover business,” said Mr Booth in the statement.
“There is still a considerable amount of work to do, and while no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks with a view to securing an agreement that is in the best interests of all parties concerned.”
There would be a sweet irony in such a takeover because Tata Group founder Jamsetji Tata started his business more than a century ago as a reaction to British colonialism in India.
“Jamsetji believed he could take on and beat the colonial masters at a game they had rigged to their advantage,” says the official Tata history of the founding of his first textile business in 1869.
The company subsequently grew into an industrial giant, with Tata Motors being founded in 1945. It started building Mercedes commercial vehicles in 1954 and is now the biggest automotive company in India.
The projected Tata purchase of Jaguar and Land Rover is estimated to be worth up to $2.2 billion to cash-strapped Ford.
Ford bought Jaguar in 1989 for around $2.8 billion and then purchased Land Rover from BMW in 2000 for just over $3.0 billion.
Mumbai-based Tata Motors also issued a statement yesterday that cautiously notes the negotiations are progressing well and may be finalised in a matter of weeks.
“We are now entering a period of more focused and detailed negotiations with Ford,” said the Tata statement.
“We hope both parties can reach an agreement in the forthcoming weeks, though these are complex discussions and there is still much work that needs to be done before that position is reached. We are pleased by the progress in the discussions to date and very positive about the prospects of this business going forward.”
Tata is the only Indian carmaker listed on the New York stock exchange.
It developed the Tata Indica as India’s first indigenously manufactured car in 1998 and within two years it became the top-selling car in its segment.
Although Tata has three plants in India, Jaguar and Land Rover production will remain in the UK, where the companies have about 15,300 employees.
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