Tata Buys Jaguar and Land Rover

Written on 3:57 PM by Unknown

Car giant Ford has sold its luxury UK-based car brands Jaguar and Land Rover to Indian company Tata. Tata, India's biggest vehicle maker, is paying $2.3bn (£1.15bn) for the British brands after months of negotiations over price and supply relationships.

The deal is another sign of the growing economic muscle of India and something of an economic role reversal, with two icons of British industrial might expanding the global reach of a premier conglomerate in the former British colony.

Ford nets about $1.7 billion, a far cry from what it paid for the properties -- $2.5 billion for Jaguar in 1989 and $2.7 billion for Land Rover in 2000. Counting losses and product development, analysts figure Ford spent more than $10 billion on the brands.

Those acquisitions, like General Motors' purchase of Saab and Chrysler's entanglement with Mitsubishi, came when cash was rolling in at the U.S. automakers as drivers snapped up cars and pricey pickup trucks and sport utility vehicles.

Jaguar and Land Rover employ about 16,000 staff at UK plants in the West Midlands and Merseyside. Although Land Rover remains profitable, Ford has never managed to make money from its investment in Jaguar.

The Tata Group has been at the forefront of corporate India’s outbound acquisitions with the latest being Jaguar and Land Rover from Ford for 2.3 billion dollars.


A look at the significant acquisitions by the TATA Group

• 2000- Tata Tea acquires the Tetley Group, UK. This is the first major acquisition of an international brand by an Indian business group worth 275 million pound.

• 2004- Tata Motors buys the heavy vehicles unit of Daewoo Motors, South Korea for about 102 million dollars.

• 2005- Tata Steel snapped up Singapore-based steel company NatSteel by subscribing to 100 per cent equity of its subsidiary, NatSteel Asia and spent 486 million dollars on the deal.

• 2005- Tata through VSNL take overs Tyco Global Network for 130 million dollars, making it one of the world's largest providers of submarine cable bandwidth.

• 2006- Tata Coffee acquires US-based Eight O'Clock Coffee for for 220 million dollars.

• 2007- Tata Steel buys Corus for a whopping 12.2 billion dollars.

• 2008-Tata makes Jaguar and Land Rover from Ford a part of its empire for 2.3 billion dollars.

Tata is India's oldest and largest conglomerate, with holdings in steel, information technology and auto. Tata Motors is the automobile arm of the company. It should have the cash to save Jaguar and Land Rover and develop new products to better compete with luxury automakers.

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