It’s Official: Jaguar Land Rover Has Been Sold
Below the jump, you can read Tata‘s official statement on buying Jaguar and Land Rover, now Jaguar Land Rover, from Ford today. However odd it may seem for these illustrious British marques to be owned by an Indian conglomerate, Tata may well end up being an excellent caretaker.
At least initially, it seems that Tata Motors is looking to let the company continue with the product plans in place before the sale. Tata has ensured supply of needed engines and stampings through “long-term” agreements with Ford Motor Company and appointed David Smith the new Jaguar Land Rover CEO. Mr. Smith, who had been Jaguar Land Rover’s CFO, took on the role of acting CEO after Geoff Polites death in April. The appointment of a long-time Land Rover principal, holding twenty-five years with the SUV maker, indicates further support of the existing management staff.
As Tata gets more deeply involved, the business situation is bound to change. But the Indian company has patience, and seems to be ready to learn about the international business before making significant changes.
Tata Motors completes acquisition of Jaguar Land Rover
Mumbai, June 2, 2008: Tata Motors today acquired the Jaguar Land Rover businesses from Ford Motor Company for a net consideration of US $2.3 billion, as announced on March 26, in an all-cash transaction. Ford has contributed about US $600 million to the Jaguar Land Rover pension plans.
Mr. Ratan N. Tata, Chairman of Tata Sons and Tata Motors, was present at the handing over ceremony at the head quarters of Jaguar Land Rover at Gaydon in the UK along with Mr. Don Leclair, the Executive Vice President and Chief Financial Officer of Ford Motor Company, and Mr. Lewis Booth, Executive Vice President of Ford Motor Company, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover.
Commenting on the occasion, Mr. Tata said, “This is a momentous time for all of us at Tata Motors. Jaguar and Land Rover are two iconic British brands with worldwide growth prospects. We are looking forward to extending our full support to the Jaguar Land Rover team to realise their competitive potential. Jaguar Land Rover will retain their distinctive identities and continue to pursue their respective business plans as before. We recognise the significant improvement in the performance of the two brands and look forward to this trend continuing in the coming years. It is our intention to work closely to support the Jaguar Land Rover team in building the success and preeminence of the two brands.”
Tata Motors confirmed that Mr. David Smith, the acting Chief Executive Officer of Jaguar Land Rover, would be the new CEO of the business. Mr. Smith has 25 years of experience with Jaguar Land Rover and Ford. Before recently returning to Jaguar Land Rover as its Chief Financial Officer, he was Director Finance and Business Strategy for PAG and Ford of Europe.
Mr. Smith said, “We are very pleased with the association with Tata Motors. We look forward to a sustained bright future for the company and its stakeholders.”
Jaguar Land Rover has been acquired at a cost of US$ 2.3 billion on a cash free, debt-free basis. The purchase consideration includes the ownership by Jaguar and Land Rover or perpetual royalty-free licences of all necessary Intellectual Property Rights, manufacturing plants, two advanced design centres in the UK, and worldwide network of National Sales Companies.
Long term agreements have been entered into for supply of engines, stampings and other components to Jaguar Land Rover. Other areas of transition support from Ford include IT, accounting and access to test facilities. The two companies will continue to cooperate in areas such as design and development through sharing of platforms and joint development of hybrid technologies and powertrain engineering. The Ford Motor Credit Company will continue to provide financing for Jaguar Land Rover dealers and customers for a transition period. Tata Motors is in an advanced stage of negotiations with leading auto finance providers to support the Jaguar Land Rover business in the UK, Europe and the US, and is expected to select financial services partners shortly.
About Tata Motors
Tata Motors is India’s largest automobile company, with revenues of US$ 8.8 billion in 2007-08. With over 4 million Tata vehicles plying in India, it is the leader in commercial vehicles and among the top three in passenger vehicles. It is also the world’s fourth largest truck manufacturer and the second largest bus manufacturer. Tata cars, buses and trucks are being marketed in several countries in Europe, Africa, the Middle East, South Asia, South East Asia and South America. Through subsidiaries and associate companies, Tata Motors has operations in South Korea, Thailand and Spain. It also has a strategic alliance with Fiat.