India's Tata Acquires Jaguar, Land Rover For 2.3 Billion Dollars

[Overdrive]

http://uk.cars.yahoo.com/26032008/36/jagua...ell-tata-0.html

Two of Britain's most famous car-making names are now under Indian ownership.

In a £1 billion deal, India's Tata will take control of Jaguar and Land Rover.

The deal secures the future of the British firms and their 16,000 employees while also helping Ford out of financial troubles.

Unions representing the workers at the two companies have given the deal their backing and say Tata was always the preferred bidder.

Tata began the protracted buying process in June 2007 when Ford first announced its plans to sell off Jaguar and Aston Martin.

This announcement followed shortly after Ford had sold Aston Martin for £550 million.

Ford is also thought to have guaranteed pensions for the Jaguar and Land Rover staff.

Tata is the largest vehicle manufacturer in the Indian sub-continent and recently revealed its Nano small car, which is set to be the world's cheapest new car at £1,250.

[Gummybr]

http://uk.cars.yahoo.com/26032008/36/jagua...ell-tata-0.html

Two of Britain's most famous car-making names are now under Indian ownership.

In a £1 billion deal, India's Tata will take control of Jaguar and Land Rover.

The deal secures the future of the British firms and their 16,000 employees while also helping Ford out of financial troubles.

Unions representing the workers at the two companies have given the deal their backing and say Tata was always the preferred bidder.

Tata began the protracted buying process in June 2007 when Ford first announced its plans to sell off Jaguar and Aston Martin.

This announcement followed shortly after Ford had sold Aston Martin for £550 million.

Ford is also thought to have guaranteed pensions for the Jaguar and Land Rover staff.

Tata is the largest vehicle manufacturer in the Indian sub-continent and recently revealed its Nano small car, which is set to be the world's cheapest new car at £1,250.

As far as I know they are supposed to put out the MOU or whatever today.

I think many Jag and Land Rover lovers would be wishing that Tata will help these two brands build a better strong hold which none of the earlier owners did.

And fingers crossed hope that Tata will do what Renault did to Nissan.

Tata will not interfere with the new model put out by these two brands namely the new Jag XF (I personally dont like it) and the upcoming XJ, F Type and the Land Rover LRX. Its a shame that Ford is selling these brands at a time where Jag is on the verge of lifting its head with the new XF and upcoming newer models.

On the long run as discussed in an older forum topic Tata will take out the technology of these brands and will use them to get through to the clientèle which they never had access to.

There are endless possibilities but I dont think LR and Jag lovers will feel bad about all this.

Mayb LR and Jag owners in the forum can share their thoughts.

[xXx]

IMO Tata is the way forward for both Tata and LR/Jag as both need each other for their future survival. LR/Jag need Tata’s cash flow and Tata need LR?Jag’s technology and know how in the market to tap in to new segments. Ford did themselves a big favor as well by dishing out these two marque brands as their balance sheet has been very tragic for few years now. They are even thinking of completely closing down all of their production plants for a month in a desperate bid to cut down cost.

As Don always say it’s far better for both the industry and the enthusiasts that failing automotive giants to be snapped by its competitors rather than private equity firms.

What do you guys think about Porches take over of VW after the landmark court battle couple of weeks ago?

[dinosh]

The deal is supposed to be $2.3 billion. Tata would be seriously looking at getting the max out of Jag & LR since they are investing a massive amount!! At the moment of the takeover some future plans have also leaked out, check on below link!

http://www.leftlanenews.com/jaguar-land-ro...le-to-tata.html

It'll be a good move for Porsche to takeover VW since already there is parnership between the companies coz there has been sharing when the Toureg & Cayanne was developed.

Accroding to a latest report VW is cosidering to buy over Zastava which is a Serbian car manufucturer.

[Gummybr]

Here's what the media has to say

Autocar

Car Magazine

Autoweek

Autocar

Carmagazine

[madmax]

Like this guy says in the youtube video posted on the "post whoring" thread, after ruling the Indians for 200 years, the Brits never thought the Indians will follow them back to England!"

Not only that, they're buying over their industries!

http://www.youtube.com/watch?v=a5Izw6s0AEQ

Edited March 27, 2008 by madmax

[Sha7]

NEW DELHI (AFP) — India's Tata Motors said Wednesday it had bought British luxury icons Jaguar and Land Rover from struggling US carmaker Ford for 2.3 billion dollars as it expands its global reach.

The all-cash deal is part of Tata's efforts to grow outside Asia, but analysts have questioned how the Indian firm -- maker of the Nano, the world's cheapest car -- will absorb the two high-end marques into its operations.

"We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business," Tata group chairman Ratan Tata said, pledging to keep the identities of the famous brands "intact".

Tata Motors, part of the sprawling tea-to-outsourcing Tata Group empire, said the "total amount to be paid in cash" would be 2.3 billion dollars and added Ford would contribute up to about 600 million dollars to the Jaguar and Land Rover pension plans.

The purchase, which has been the subject of speculation for months, comes amid an economic downturn which has put the squeeze on demand for prestige vehicles.

In January, Tata unveiled the Nano at a price of 2,500 dollars, hoping that the no-frills auto could revolutionise travel for millions in India and elsewhere.

But with the acquisition, Tata would be in the unusual position of making the cheapest car in the world as well as some of the most expensive.

Of late, tough global economic conditions have put sales of expensive cars into reverse. US and European sales of Jaguar fell by over 30 percent, year-on-year, during the first two months of 2008.

"Both brands are already experiencing declining sales," said Aniket Mhatre, auto analyst at Mumbai brokerage Prabhudas Lilladher.

"The US is going through a slowdown so sales (of luxury vehicles) are not going to be that good."

Tata currently controls more than half of India's truck market and nearly 20 percent of its passenger car market, and is keen to expand beyond Asia.

The company is looking at making a major technological leap by gaining access to the sophisticated engines of Land Rover and Jaguar.

Troubled US giant Ford, which has lost 15 billion dollars over the last two years, announced it was selling the two brands last year as part of a restructuring.

But analysts have expressed concern that Tata is taking on too much debt and pension fund liabilities -- and say it may have trouble absorbing the high-cost marques into its conventional vehicle line-up.

Tata has declined comment on reports it is planning to launch a three- billion-dollar syndicated loan, much of it bridge financing, to cover its working capital needs for the purchase.

But it has announced plans to additionally raise up to one billion dollars in domestic and or foreign markets to fund its domestic and global expansion.

Tata, whose long-term credit is already rated one notch below investment grade, is seeking to raise funds in a difficult global market climate, with the US-led subprime crisis making investors shun all but the safest debt.

The cost of borrowing overseas has risen sharply since last July, analysts said, when Tata's interest in the Ford luxury brands was first reported.

"It will put pressure on the ratings," said Anshukant Taneja, credit analyst at Standard and Poor's in Singapore.

[jaga]

Don't know whether prestige will last.

[Bugatti]

are we to look out for an XJ Safari..?

[Pericles]

Merged a couple of threads discussing the same thing, in case someone gets confused.

[GTAm]

It's a very brave move by Tata and it certainly won't be easy for them. They need to hire a top exec to take LR to new heights and someone even better to turn Jag around. They will have to be non Indian I believe as it has to be someone who understands the brand quite deeply, and avoid the mistakes Ford made.

Tata will have a lot on their plate, developing new engines to replace the existing ones when the Ford contract expires or new emission standards need to be met.

Anyway I'm still quite surprised at Ford's decision to sell. They got just 2.3bn while they lost 12.7bn last year from their "FORD" operations. And Aston and LR were/are profit making and brands with a lot of potential.

[xXx]

The deal is supposed to be $2.3 billion. Tata would be seriously looking at getting the max out of Jag & LR since they are investing a massive amount!!

Actually the amount is peanuts compared to what ford paid for the two marques back in late 80's and 2000. they collectively paid just over $6 billion and that is with out taking the inflation in to equation.

Like this guy says in the youtube video posted on the "post whoring" thread, after ruling the Indians for 200 years, the Brits never thought the Indians will follow them back to England!"

Not only that, they're buying over their industries!

Forget about India as a whole Tata itself is really battering the Brits. First it was British steel last year and now these two. Hunter has become the hunted

Don't know whether prestige will last.

are we to look out for an XJ Safari..?

i really hope you boys are just taking the mickey. we went through this in the previous thread

[Bugatti]

On a more serious note,

It's hard to fathom not knowing what to expect... we all know TATA is doing great in India with their own brand. But with Jag & LR..

Let;s hope for the best... either way we in SL should benefit from this, assuming the cost will reduce.

[The Don]

Well boys, I'm glad to see after months of long drawn out discussions (and I can see the Unions had a role to play in them .......... sigh ....... I am surprised at the power of labour unions especially after bringing down British Leyland and their significant contribution to the death of the manufacturing industries in Britain ......) the deal has finally gone through.

As a lot has already said it would be quite interesting to see how LR and Jaguar do without Ford Stewardship. Contrary to popular belief I think their association with Ford did both companies a whole lot of good in particular being able to shed their image of crappy build quality and various reliability issues pertaining to their engines. And Ford have obviously helped both companies with their R&D which has helped both companies to come out with a series of new models including the highly acclaimed discovery 3.

Tata will have a lot to gain from this deal and so would the companies. With the economic problems in North America and the drive for green cars in Europe Asia is fast becoming the biggest market for luxury car makers and India in particular would surely become a good market for them as time goes on. Tata has long being trying to establish itself as a major player in the international automotive industry and the technology from LR and jaguar would obviously help them in that purpose.

Plus there is the issue of brand prestige and ownership of Jaguar and Land Rover would obviously boost the image of Tata as a company.

Tata is also a far more financially stable company than Ford and has money and the zest to invest in R&D.

All of this combined leads me to believe that this is probably the best outcome for Jaguar and Land Rover especially after seeing Rover go down in the hands of private equity investors and then the Chinese who simply shipped the whole long bridge manufacturing facility to China.

Tata at least in the short term have an incentive to keep both brands alive and their manufacturing facilities in Britain.

And Bugatti, I do not think us in SL would benefit in any way unless Tata decides to open up manufacturing facilities in India and we under the Indo-Sri Lanka free trade agreement get these vehicles at a lower tax bracket than at the moment. I think Tata is more interested in their technology for their own vehicle lines rather than actually selling those vehicles in India at a reduced cost.

[Bugatti]

Tata is also a far more financially stable company than Ford and has money and the zest to invest in R&D.

Tata at least in the short term have an incentive to keep both brands alive and their manufacturing facilities in Britain.

And Bugatti, I do not think us in SL would benefit in any way unless Tata decides to open up manufacturing facilities in India and we under the Indo-Sri Lanka free trade agreement get these vehicles at a lower tax bracket than at the moment. I think Tata is more interested in their technology for their own vehicle lines rather than actually selling those vehicles in India at a reduced cost.

Debatable..

Why wouldn't TATA move or set up a manufacturing plant in India..?? they did so for Mercedes and BMW..! and besides, India has quite a number of rich people..! there are Bentley(s) on the streets.

on the other hand, we in SL get jack shit from the the "Indo-Sri Lanka free trade agreement" I'm still waiting to see some kinda benefit to the automobile world. I tried to import the Indian assembled Skoda, but the import tax in the same as from any other country.

[dinosh]

From what i feel Tata will go ahead & place production plants in India for both LR & Jag, as a long term plan. There are many rich people in India who could easily afford a LR or a Jag & also India has the advantage of low cost operation as well.

I have no idea if we will benifit through the Indo-Lanka agreement if these brands are manufactured in India.

[The Don]

Debatable..

Why wouldn't TATA move or set up a manufacturing plant in India..?? they did so for Mercedes and BMW..! and besides, India has quite a number of rich people..! there are Bentley(s) on the streets.

on the other hand, we in SL get jack shit from the the "Indo-Sri Lanka free trade agreement" I'm still waiting to see some kinda benefit to the automobile world. I tried to import the Indian assembled Skoda, but the import tax in the same as from any other country.

My point Bugatti is that Tata didn't need to invest so much money to buy Jaguar and LR if all their primary concern was to manufacture both vehicles in India. They could have simply opted for a joint venture partnership which is unlikely to be turned down. Tata already manufactures a lot of components for other motor manufacturers in India (including foreign manufacturers) and also leases out their facilities such as paint booths in their manufacturing facilities.

Their ambitions go well beyond promoting these 2 brands in India.

Also judging by the Chinese example I think companies like Tata tend to benefit more long term by the acquisition of technology rather than brand names which is the approach the Chinese have taken with great success.

Also speaking about the rich people in India, The rich in India always had enough money to buy a British built Land Rover or Jag so I do not think any of them are holding their breath until those 2 brands are built in India to buy one. Having said that I am sure both brands will get more scope in India if they were manufactured there. I was reading an article once that for most automotive manufacturers manufacturing entirely in India for the Indian market is still not a profitable proposition and most bring parts down in semi knocked down state and assemble in India rather than do it from scratch. So probably if a plants are established it would probably be in that format in the initial stages.

Edited March 28, 2008 by The Don

[Bugatti]

My point Bugatti is that Tata didn't need to invest so much money to buy Jaguar and LR if all their primary concern was to manufacture both vehicles in India. They could have simply opted for a joint venture partnership which is unlikely to be turned down. Tata already manufactures a lot of components for other motor manufacturers in India (including foreign manufacturers) and also leases out their facilities such as paint booths in their manufacturing facilities.

Their ambitions go well beyond promoting these 2 brands in India.

Also judging by the Chinese example I think companies like Tata tend to benefit more long term by the acquisition of technology rather than brand names which is the approach the Chinese have taken with great success.

Also speaking about the rich people in India, The rich in India always had enough money to buy a British built Land Rover or Jag so I do not think any of them are holding their breath until those 2 brands are built in India to buy one. Having said that I am sure both brands will get more scope in India if they were manufactured there. I was reading an article once that for most automotive manufacturers manufacturing entirely in India for the Indian market is still not a profitable proposition and most bring parts down in semi knocked down state and assemble in India rather than do it from scratch. So probably if a plants are established it would probably be in that format in the initial stages.

Ya.. for sure TATA has something bigger up their sleeves. All we see is the tip of the iceberg.

Need to discuss this over a drink..

Coming for the AL G2G..?

[The Don]

Ya.. for sure TATA has something bigger up their sleeves. All we see is the tip of the iceberg.

Need to discuss this over a drink..

Coming for the AL G2G..?

Yeps I agree

Sadly I will not be able to join the clan at the get together as I am away at the moment . I am sure it will be good fun.

[Thanushka]

Any idea abt the Jaguar Assembly plant in Sri Lanka?

[Devinda_Z]

...they did so for Mercedes and BMW..! and besides, India has quite a number of rich people..! there are Bentley(s) on the streets.

Then there's the challenge of selling Jaguars in India and a line of Indian-owned luxury brands around the world. In India, demand for the luxury marques in the short term is likely to be limited. While growing quickly, India's luxury car segment accounts for only 1% of the total car market. BMW and Mercedes-Benz, for example, sell just 3,500 cars a year in India between them. "The Jag could surely sell a couple of hundred cars in India," says Paul Blokland, chief executive of Segment Y, an auto consultancy based in the southern Indian state of Goa

Source : Business Week , March 26, 2008, 7:34AM EST

[Devinda_Z]

Tata turns to asset sales to pay for Jaguar and Land Rover!

http://business.timesonline.co.uk/tol/busi...icle4578880.ece

[viking]

With this, if TATA starts building the Range Rover and Discovery in India, does it mean that Sri Lanka will be able to import these vehicles duty free under the new trade agreements as the product being owned and made in India?

[Gummybr]

With this, if TATA starts building the Range Rover and Discovery in India, does it mean that Sri Lanka will be able to import these vehicles duty free under the new trade agreements as the product being owned and made in India?

Highly unlikely till the 5 years finish, but by that time they should have all the assets to carry out the assembly of the high profile vehicles. But then again there might be a newer version of the Disco and RR (Aluminum RR should be out) out.

[The Don]

Tata turns to asset sales to pay for Jaguar and Land Rover!

http://business.timesonline.co.uk/tol/busi...icle4578880.ece

Yes the rights issue they planned wasn't very popular with existing share holders, and with trouble in the credit markets it seems the only sensible way forward !