Ford sells luxury brands Jaguar, Land Rover for $2.3B to India’s Tata Motors
Ford sells luxury car brands Jaguar, Land Rover for $2.3B to India’s Tata Motors
Automaker announces deal to sell luxury brands to India’s Tata Motors; Ford says sale will close by the end of next quarter.
DETROIT (AP) — Ford Motor Co. announced Wednesday that it has agreed to sell British automakers Jaguar and Land Rover to India’s Tata Motors Ltd. in a deal that will net the struggling U.S. automaker about $1.7 billion - roughly a third of the price it paid for the two luxury brands.
Tata Motors said the acquisitions would extend its reach around the globe.
The agreement had been in the works for months as cash-strapped Ford sought money to fund its turnaround plan.
Deal will close next quarter. Ford said the sale would close by the end of next quarter, at which point Tata Motors would hand over $2.3 billion in cash. However, at the close of the sale, Ford said it would contribute about $600 million to pension plans.
Ford also said it would continue to supply the two brands with automobile components “for differing periods,” and provide environmental and other technologies, as well as engineering support.
Official hails deal. Roger Maddison, an official with Unite, Jaguar and Land Rover’s main labor union, said the deal is good news for the automakers’ employees as well as those who work for parts suppliers.
“Unite has secured written guarantees for all five UK plants on staffing levels, employee terms and conditions, including pensions, and sourcing agreements. The sale ensures our members’ futures, and we look forward to working with Tata,” Maddison said in a statement.
Tata Chairman Ratan N. Tata said his company will try to build on the brands’ heritage, 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,” he said in a statement.
Ford paid $2.5 billion in ‘89. The U.S. automaker bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. But it has been struggling and wants to focus on its main brands.
“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,” Ford CEO Alan Mulally said in a statement.
Ford (F, Fortune 500) shares rose 8 cents to $6.08 in premarket trading Wednesday. Its shares have traded in a 52-week range of $4.95 to $9.70.
Ford sells luxury car brands Jaguar, Land Rover for $2.3B to India’s Tata Motors
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Could it be that Lexus marketers are trying to attract those people who simply aspire to wealth, but who may not actually BE wealthy? Since, as you state, it’ s pretty easy and not super expensive to lease a luxury vehicle, the Lexus marketing strategy may simply be to reach that person who really wants to impress– be it his girlfriend (or prospective girlfriends), his boss or clients. If that is the case, then Lexus may be hitting its target market right on the head!
God I hope FORD does the right thing here. I love my ‘02 Mustang GT but I have begun to realize I have to get better fuel mileage and to do that it seems I have to get a lighter car. For me this will be in about 2 years as I have to pay of the F250 first as I can’t afford to make two vehicle payments but what to get? However it still has to be as FUN to drive as the GT is. As I can’t afford a BMW 135 what will it be, a MazdaSpeed 3, a Mini Cooper S, A Subaru WRX? None of these gets that much better mileage…