Tata steers closer to acquiring Ford luxury brands
An Indian carmaker has moved to the forefront of negotiations to buy two of the world’s most prestigious car brands from Ford Motor Co.
On Thursday, Ford named Mumbai-based Tata Motors the preferred bidder for Jaguar and Land Rover. Tata beat out a rival Indian automaker and an American private equity firm, and sale talks are now expected to enter its final phase.
“While no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks,” said Lewis Booth, Ford executive vice president.
“These are complex discussions and there is still much work that needs to be done,” Tata said of the news.
Ford acquired Jaguar in 1989 and Land Rover in 2000 for a combined $5.2 billion. The Detroit automaker had purchased them to complement its parallel acquisitions of Aston Martin and Volvo, which all became part of its Premier Automotive Group.
Ford does not release financial results for its individual brands, but industry analysts say the combination has never generated the success that the automaker anticipated. It sold Aston Martin in May for $921 million to a consortium of British investors and later announced plans to unload Jaguar and Land Rover.
Ford has said it intends to hang on to Volvo, investing money in making it more upscale.
For Tata, which built its first car only a decade ago, the acquisition would be a significant step forward. Known for its low-priced cars aimed at Indian buyers, Tata’s control of the two British marques would immediately make it a player in the luxury market. It also would provide the Indian carmaker access to far more modern technologies as well as new markets.
Tata has recently garnered attention for its plans to release a sub-$3,000 economy car. What synergies exist between the world’s least-expensive econobox and $75,000-plus sports cars and luxury sports cars that top $100,000 remains to be seen.
Among the other bidders for Jaguar and Land Rover were Indian automaker Mahindra & Mahindra and One Equity Partners, a New York private equity firm that makes investments for JPMorgan Chase & Co. Ford did not provide information on the bidding for the two brands, but outside reports said bids for the two brands were in the $1.5-billion to $2-billion range.
No firm timetable for the completion of negotiations was announced.
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