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Jag/Rover in Mumbai?

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  • 03-01-2008 8:08pm
    #1
    MCMLXXXIII
    Closed Accounts Posts: 412 ✭✭


    So today Ford Motor Co declared Tata Motors of the Mumbai, India-based Tata Group conglomerate the top bidder for Jaguar and Land Rover. The only other two bidders are Mahindra (also of Mumbai) and One Equity Partners (hedge fund of New York City). Apparently Unite likes Tata, but wants them to employ the 15,000 workers and keep them in the UK.

    Ford already sold Aston Martin to Investment Dar of Kuwait a few months ago. After the sale of Jag and Rover, Ford plans to keep Volvo and make it "more premium."

    The article is below. Feel free to scroll through, as it just gives more details to what is said above.


    Ford chooses India's Tata as top bidder for Jaguar, Land Rover

    Ford Motor Co. has picked India’s Tata Motors Ltd. as the top bidder to buy its Jaguar and Land Rover units, the Detroit automaker said Thursday.

    Ford said in a statement that it has entered into “focused negotiations at a more detailed level” with Tata, which means Tata has been picked as a preferred bidder for the storied British automakers.

    “There is still a considerable amount of work to do, and while no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks with a view to securing an agreement that is in the best interests of all parties concerned,” said Lewis Booth, executive vice president of Ford’s European units, in a statement.

    Jaguar and Land Rover employees in the United Kingdom were told about the negotiations Thursday morning shortly before the company made the announcement.

    Ford executives have said they expect to announce the sale of the two British automakers early this year.

    Ford spokesman Jay Ward in London would not comment on how much Tata bid for the automakers, nor would he say if the other two bidders, Indian automaker Mahindra & Mahindra Ltd. and U.S. private equity firm One Equity Partners LLC, were still in the running.

    But a person who has been briefed on the negotiations said Thursday that Mahindra and One Equity still are under consideration, although Tata is the likely buyer unless negotiations fall through.

    “Ford hasn’t told them to go away, and that’s the end of it,” the person told the Associated Press. “Tata’s emerged as the preferred partner.”
    The person requested anonymity because the talks are confidential.

    In a statement issued Thursday, Mumbai-based Tata Motors confirmed that it is negotiating with Ford.

    “We are now entering a period of more focused and detailed negotiations with Ford. We hope both parties can reach an agreement in the forthcoming weeks, though these are complex discussions and there is still much work that needs to be done before that position is reached,” the statement said. “We are pleased by the progress in the discussions to date and very positive about the prospects of this business going forward.”

    Last month, people close to the negotiations told the AP the potential suitors had submitted bids that ranged from $1.5 billion to $2 billion.

    Jaguar’s main labor union, Unite, has said it would prefer Tata if the company is sold.

    Unions in the United Kingdom are seeking assurances that the sale would not affect employment levels. Combined, Jaguar and Land Rover employ about 15,300 in the U.K.

    Ford is interested in maintaining its parts supply relationship with the new owners of Jaguar and Land Rover. The company builds engines for Jaguar in Europe.

    Industry analysts have said Ford would like to find a buyer who would preserve the Jaguar and Land Rover heritage and jobs in the U.K. Ford, which is the top auto seller in the U.K., doesn’t want to rankle its British customers, they said.

    Cash-hungry Ford, which lost $12.6 billion last year but earned $88 million in the first nine months of 2007, has been looking to sell Jaguar and Land Rover.

    It has mortgaged its assets to borrow money to stay operating and expects to burn up $12 billion to $14 billion until 2009, when it plans to return to sustained profitability.

    Jaguar and Land Rover have been hit by unfavorable exchange rates and high production costs in Britain.

    Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000, joining them with Aston Martin and Volvo to form its Premier Automotive Group.

    Earlier this year Ford completed the sale of its controlling stake in Aston Martin for $931 million in cash and preferred stock.

    Ford has said it plans to keep Volvo for now, fixing its cost structure and making it a more premium brand.

    (c) 2007. The Associated Press. All Rights Reserved.


    So, what do we think?


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