|
New Delhi: Tata Motors said on Wednesday it had bought British luxury icons Jaguar and Land Rover from US carmaker Ford Motor Co for $2.3 billion.
Tata Motors has "entered into a definitive agreement with the
Ford Motor Company for the purchase" of Jaguar and Land Rover with the "total amount to be paid in cash to be 2.3 billion dollars," Tata Motors said in a statement.
"We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business... and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact," said Tata Group chairman Ratan Tata.
The figure is much less than Ford originally paid for either of the brands. Ford has been looking to sell Jaguar and Land Rover to strengthen finances after losing $2.7 billion last year and $12.6 billion in 2006.
The impending acquisition of the two iconic brands marks another major step by the tea-to-truck conglomerate towards globalisation of its vast business empire.
Early last year, Tata Steel made international news when it acquired Anglo-Dutch steel maker Corus for $ 12.9 billion.
The lengthy sale process of Jaguar and Land Rover started last June when Ford announced its intention to sell the companies as a package. Analysts are keen to see the exact price and terms.
Jaguar and Land Rover employ about 16,000 staff at plants across the West Midlands and Merseyside.
Tata accounts for more than half of the sub-continent's truck market and has about 20% of India's car market.
The car workers union, Unite, has said that Tata was the preferred bidder for the company.
Jaguar and Land Rover require hundreds of millions in investment over the next few years and returning Jaguar to profitability will neither be easy or without risks, sources said.
Reports indicate that the agreement will include Ford’s commitment to continue contributing to the pension funds of the two brands.
The Tatas, on their part, are expected to pledge to continue buying engines for the two brands from Ford and the company will retain the present workforce of the two brands, the sources said.
In January, Tata launched the world's cheapest car, the Nano, priced at $2,500. By contrast, the starting price for Jaguar's latest sports car, the XF is more than £32,000.
It is thought that Ford has invested about $10bn in Jaguar since buying it in 1989, for $2.5bn. Despite that investment, analysts say that Jaguar has never made a profit for Ford.
However, Land Rover has been profitable under Ford's ownership.
|
