Ford announces $2.3 billion sale of Jaguar, Land Rover to Tata

Source: Manufacturing Digital

Date :26/03/2008 09:18:57

Ford Motor Co finalises the sale of its luxury brands Jaguar and Land Rover to India's Tata Motors Ltd.

Sources close to the deal said last week that Ford – who acquired Land Rover from German carmaker BMW in 2000 and bought Jaguar in 1989 - was expected to announce the sale of the luxury marques this week, just ahead of the carmaker's target of closing the deal by the end of the first quarter.

It is believed that all major details of the sale were already agreed by last week, although the announcement of the deal had been awaiting the return to work of Jaguar’s employees.

The two companies have been negotiating since early January.

Purchase agreement

The sale will include a pledge by Ford to contribute £300 million to the two brands’ pension fund, and by Tata to continue buying engines from Ford – both sensitive points with trade unions.

The two UK carmakers' combined pension fund deficit was worth nearly £200 million when last reported.

Union support

Tata, which owns the Anglo-Dutch steel maker Corus, and Tetley Tea, gained key backing for its bid from Unite, Jaguar and Land Rover's main trade union, by expressing support for the two brands' current management and five-year business plan.

However, they will be looking for assurances over investment, plant and job security.

At the Geneva Motor show this month, Tata’s head, Ratan Tata, said he planned to keep “the image, touch and feel” of the two marques.

“There is no reason to tinker with the brands. Our challenge is to make them grow,” he said.

March 25, 2008