• Mar 26, 2008
Ford has issued a press release confirming that it has sold both Jaguar and Land Rover to Tata Motors for an approximate price of $2.3 billion, which comes under some numbers as high as $2.65 billion that were being tossed around yesterday. The rumor that Ford will contribute to pension funds associated with the brands is also true, as it confirmed that $600 million will be dropped into the retirement coffers of the brands once the deal closes. It is, of course, subject to regulatory approval in a number of countries, but the automaker expects the deal to be done by the end of the following quarter. As part of the deal, Ford will continue to supply powertrains, stampings and other unnamed vehicle components to Tata for "differing periods", as well as R&D research, environmental and platform technologies, and even accounting services, among others. Clearly the ties that bind Jaguar Land Rover to Ford are strong and will take some time to undo. Judging from the press release, it seems all parties involved, including the employees of Jaguar Land Rover, are pleased with how the deal went down, and for the time being both brands will be run business as usual during the transition period.

[Source: Ford]

PRESS RELEASE

FORD MOTOR COMPANY ANNOUNCES AGREEMENT TO SELL JAGUAR LAND ROVER TO TATA MOTORS

DEARBORN, Mich., March 26, 2008 – Ford Motor Company [NYSE: F] announced today that it has entered into a definitive agreement to sell its Jaguar Land Rover operations to Tata Motors.

The transaction is the culmination of Ford's decision last August to explore strategic options for the Jaguar Land Rover business, as the company accelerates its focus on its core Ford brand and "One Ford" global transformation.

The sale is expected to close by the end of the next quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

The total amount to be paid in cash by Tata Motors for Jaguar Land Rover upon closing will be approximately US $2.3 billion. At closing, Ford will then contribute up to approximately US $600 million to the Jaguar Land Rover pension plans.

"Jaguar and Land Rover are terrific brands," said Alan Mulally, president and CEO, Ford Motor Company. "We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all."

"This is a good agreement. It provides the Jaguar Land Rover management team and employees with the assurances needed to maintain their focus on delivering the best results for the business," said Lewis Booth, executive vice president, Ford Motor Company, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover. "I am confident that, under its new owner, Jaguar Land Rover will continue to build upon the significant improvements and product successes it has achieved in recent years."

As part of the transaction, Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services.

In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months.

The parties believe these arrangements will support Jaguar Land Rover's current product plans, while providing Jaguar Land Rover freedom to develop its own stand-alone capabilities in the future that will best serve its premium manufacturer requirements.

The parties do not anticipate any significant changes to Jaguar Land Rover employees' terms of employment on completion.

Speaking about today's agreement, Mr. Ratan N. Tata, Chairman of Tata Sons and Tata Motors, commented: "We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business."

Jaguar Land Rover's employees, trade unions and the UK Government have been kept informed of developments as the sale process progressed and have indicated their support for the agreement.

Speaking on behalf of Jaguar Land Rover, Geoff Polites, chief executive officer, said: "Jaguar Land Rover's management team is very pleased that Ford and Tata Motors have come to an agreement today. Our team has been consulted extensively on the deal content and feels confident that it provides for the business needs of both our brands going forward.

"We have also had the opportunity to meet senior executives from Tata Motors and the Tata group," Polites continued. "They have expressed confidence in the team that has delivered significant improvements in Jaguar Land Rover's business performance. We feel confident that we can forge a strong working relationship with our new parent company, and we look forward to a bright and successful future for Jaguar Land Rover."


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  • 22 Comments
      • 6 Years Ago
      If the 2 global monsters BMW and Ford cannot help these 2

      Then what can the world's cheapest car maker do to revive or just gonna make it worse ?


      I am sure BMW and Ford weren't short of money. Does the world's cheapest car maker have as much money as BMW or Ford, the expertise ?
        • 6 Years Ago
        Tata Group net income (2007): $4b
        FordMoCo net income (2007): -$2.7b

        As for the person who made the steak joke, the Tata family are Zoroastrians, not Hindus.
      • 6 Years Ago
      Ford...Never Ever Sell Volvo. It is the crown brand on your head.
      • 6 Years Ago
      Everyone knew Jaguar's been bleeding red ink for at least two decades now, but has Land Rover ever been profitable? BMW sure was relieved to unload that crap onto Ford back in 2000 after years of losses...

      With all the British garbage gone, the Ford family is suddenly a winning one: Mazda and Volvo. Hold on to them.
        • 6 Years Ago
        I, for one, welcome our new Hindu overlords.

        * I guess no more steak at the corporate bbq's?
          • 6 Years Ago
          " I guess no more steak at the corporate bbq's?"

          Why?

          Lot of Hindus love steak, especially if it is grilled with proper spices.

          BTW, there is nothing in hinduism that bans meat. Every hindu is free to make his/her own choices in all matters.
        • 6 Years Ago
        "...it is part of Hindu tradition to avoid the consumption of beef." - Wikipedia

        http://www.religionfacts.com/hinduism/things/cow.htm

        Yes, I was making a joke at a TRUE stereotype. Pull the knickers down a little, they seem to be riding up a bit.
      • 6 Years Ago
      Mr. Tata better be able to afford the billions of dollars that will be needed to resurrect Jaguar. Unless he plans to mass produce Jaguars in India and hope that buyers don't ask for the country of origin, I don't see any short-term gain.

      Jaguar/Land Rover would have been better off under Honda. They have more cash and engineering resources. Besides, getting Jaguar means getting a RWD platform and access to a modern V-8 engine. That alone would mitigate most of the purchase price. Honda then could have blended its excellent engineering with Jaguar's mastery of luxurious design. Put some Honda guys in charge of production to kink out quality problems and you have a great luxury brand able to go against BMW and Mercedes.
      • 6 Years Ago
      w00t.

      So, how long 'til Tata realizes their mistake and tries to sell it to someone else.

      BTW: Tata. Best car brand name ever.
      • 6 Years Ago
      The fact that India's an ex-brit colony doesn't really matter here, after you consider the irony for a moment or two... what matters is the question that will Tata Motors be able to turn it around for the ailing Jaguar Brand, my gut feeling is that it will, but time will tell if my gut feeling is right, for now, as an Indian I am happy that Jag's in the bag
      • 6 Years Ago
      So, based on Ford's release, the engine and powertrain plants that build the AJ-V8 and it's brethren will remain with Ford and they will continue to supply not only Jag and LR under this sale, but Aston under the previous sale. Also sounds like Ford keeps the it's aluminum stamping technology for future vehicles.
      • 6 Years Ago
      It is always a good news when you start buying businesses of the country which occupied your country once. I hope more Indian businesses follow suit.

      One of the best non-violent ways to take over.

      BTW, I suggest Tata to throw these companies away quickly if ROI doesn't work out.

        • 6 Years Ago
        "It is always a good news when you start buying businesses of the country which occupied your country once. I hope more Indian businesses follow suit."

        Unfortunately, the sale to Tata makes me even more hesitant to buy Jaguars and Range Rovers in the future.

        On the other hand, the sale of Aston Martin to Dave Richards and Co. made me desire Aston Martin a lot more than before.

        "BTW, I suggest Tata to throw these companies away quickly if ROI doesn't work out."

        With this complicated contract between FoMoCo and Tata, it'll be very difficult for Tata to dump the brands in the near future.
      • 6 Years Ago
      Snips from BW article:

      "Tata might in fact improve the prestige of these brands by spending more on marketing than Ford did. They might have the money to invest in research and development too so that these ranges are more high design/high performance," says Allyson Stewart-Allen, director of International Marketing Partners, a London consulting firm.


      That seems to be the game plan being written by Tata Chairman Ratan Tata (BusinessWeek.com, 8/2/07), a car enthusiast who sits on the board of Italian automaker Fiat (FIA.MI) and has said he also wants to own part of Ferrari. "Our plan is to retain the image, the touch, and the feel of Jaguar and Land Rover," Tata said at the Geneva Auto Show last month. "We will not tinker with the brands in any way… they are special global brands and whoever acquires them has a responsibility to nurture them and enable them to prosper."


      link: http://www.businessweek.com/bwdaily/dnflash/content/mar2008/db20080325_325999.htm?chan=top+news_top+news+index_top+story

      • 6 Years Ago
      Has Ford kept a piece of Jaguar/Land Rover, as they did with Aston-Martin?

      Anybody know?
      • 6 Years Ago
      Mahatma Gandhi is laughing now at the Brits!
      • 6 Years Ago
      Nice Tatas. :(
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