TATA - FORD LAND ROVER TAKEOVER

Tatas may snap up Ford's Jaguar, Land rover by end-2007

20 December, 2007

BY OUR AUTOMOBILE CORRESPONDENT

By the end of December 2007, Tata may acquire Ford’s Land Rover and Jaguar brands. According to an auto industry report, the Tatas might be named the preferred bidder for the Ford brands.

The race is still on for pocketing the two auto brands with another Indian company – Mahindra and Mahindra - also in the fray. In case Ford says yes to Tatas’ bid, it will be a historic moment for the car industry as it will be for the first time that a western car company is being bought out by an Indian firm. According to a British newspaper report, the US carmaker is expecting to make up to £1 billion from the sale, although it is expected to keep some form of equity interest in the devolved business.

In a development that would prove to be beneficial to the Tatas, trade unions too are understood to have supported the bid by the Tatas. It is widely believed that the Tatas would offer more long-term security than the other bidder, US’s own One Equity.

The Jaguar and Land Rover together have 15,000 employees in the UK. It is rumoured that Tata plans to retain all three of the UK factories. Meanwhile, some of the union leaders have expressed concern about market positioning, fearing that the luxury marques will not sit well in the group. They are also concerned about the company’s potential to source components or manufacturing from overseas, costing British jobs.

The Tatas had expanded into Britain and is continuing its success in the nation ever since it took over the Tetley tea brand. The Indian major is currently the world’s fifth-largest steelmaker after buying Corus.

However, in its home terrain, the company, of late, slipped into controversial territory following violence in West Bengal after negotiations over land for its small car plant took a beating. The group, made up of 98 operating companies in business sectors including steel, salt, software, tea, energy, cars and trucks, hotels and chemicals, however is undeterred, and is in the process of rolling out its Rs 1-lakh small car soon.

 

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