Turns out, Tata’s the winner

 

 

In an extremely low-key announcement, Tatas and Ford have announced the details of the deal for the transfer of the iconic car brand Jaguar and Land Rover. The total amount to be paid in cash by Tata Motors for Jaguar Land Rover upon closing will be approximately US $2.3 billion.

The deal is expected to be closed by the end of the next quarter and issues involving the union, pensions, and agreements for technology transfer have been sorted out.To start with, Ford will contribute up to approximately US $600 million to the Jaguar Land Rover pension plans. As part of the transaction, Ford will also 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.

Commenting on today’s agreement, Mr Ratan N Tata, Chairman of Tata Sons and Tata Motors, said , “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 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.”

Tata Motors said that the $2.30 billion deal would be funded through a mix of existing cash reserves and new debts. Recently, Tata Motors had announced that its Board has approved raising of Rs 4,000 crore (about one billion dollar) from either overseas or domestic markets through issuance of securities.