Tata, M&M eye Jaguar, Landrover

Tata Motors is certainly making news and all for the right reasons. Close on the heels of creating a stir by indicating that it may sell luxury brands from the Fiat stable like Ferrari, Alfa Romeo, Maserati and Lancia, the company is now reportedly in the fray to acquire iconic British brands Jaguar and Land Rover from Ford Motor Company.

Even though the brands are now owned by an American company, they still hold immense sentimental value for the British as they hold Royal warrants from Queen Elizabeth II and Prince Charles.
The other Indian company exploring the possibilities to bid for these two brands is the tractor and utility vehicle major Mahindra & Mahindra.

As is typical in matters like these, both the companies have refused to comment on the issue although sources said that both the companies have signed confidentiality agreements and are currently “evaluating” the possibility of making a bid.
Other than the Indian manufacturers, private equity firms like Apollo Management LP, Cerberus Capital Management LP, Blackstone Group LP and Alchemy Partners are also interested in the Jaguar-Land Rover deal.

Merrill Lynch analysts reportedly pegged both brand’s valuations between $1.3-1.5 billion, way below what Ford had paid to acquire them.
Ford had bought Jaguar in 1989 for $2.5 billion after Margaret Thatcher nationalized the company and in 2000, it bought Land Rover from BMW for $2.7 billion, a total of more than $5 billion for both the brands.
Over the past 18 years that Jaguar has been with Ford, it has piled up a cumulative loss of about $ 2.5 billion but Land Rover has strong sales and has been generating profits.

source:auto.indiatimes.com