UPDATE: Ford just confirmed the sale to Tata for $2.3 billion. We'll have more as details emerge -- the press release follows this item:
A variety of outlets, including the New York Times, are reporting that the sale of Jaguar and Land Rover will be announced tomorrow.
Ford has been trying to unload both British brands for more than a year, since the successful sale of Aston Martin to a group of Kuwaiti-led investors netted the company $925 million. The Jaguar-Land Rover deal, with India's Tata Motors, has gone through an extensive bidding process that weeded out hedge funds fronted by former Ford exec Jac Nasser, even other Indian automakers, before narrowing down the field to Tata.
The deal for the brands could total $2 billion, the Times says. But while it will mean a change of hands and a change in control, Ford's role in the duo won't come to an immediate halt. The various production arrangements and supplies of parts could take a few years to unwind. And at $2 billion, the deal would value the brands significantly less than was being talked about just last year -- with some outlets reporting Ford's asking price was initially around $8 billion.
As a part of the deal, the Times adds, the Jaguar headquarters will remain in Coventry, England, and the existing product plan will not be altered until at least 2011.
Tata is in the midst of a huge global expansion, and could end up with the most wildly divergent group of cars on the planet -- from the Jaguar XKR-S to the Queen's favorite Range Rover to the teensy, $2500 Tata Nano.
Ford Motor Company Announces Agreement to Sell Jaguar Land Rover to Tata Motors
DEARBORN, Mich., March 26 /PRNewswire-FirstCall/ -- 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
The sale is expected to close by the end of the next quarter and is
subject to customary closing conditions, including receipt of applicable
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."