Tatas, Mahindras in race for Jaguar, Land Rover

August 21, 2007

Luxury vehicle-makers Jaguar and Land Rover have been put up for sale by parent Ford with a price tag of up to £4 billion. And, Indian auto majors – the Tatas and the Mahindras -- are believed to be in the race to bid for the Midlands motor legends.

According to a report, the Ford board running the Jaguar and Land Rover businesses is now engaged in a series of meetings with the bidders including the Tatas, and Mahindra and Mahindra. The Indian companies are looking at finalizing the deal by early 2008.

The report said that Ford has invited them to meet the management of both Jaguar and Land Rover over the next three weeks. Ford’s next step will be to open its books to the bidders, under the due diligence procedure. Ford Motor is said to be seeking assurances that whichever bidder eventually buys the two companies will keep all the UK factories open for at least five years to safeguard British jobs. Fears of threats to jobs have so far proved groundless in the UK, where senior Tata executives have been visiting major Corus plants including the Wednesfield Steelpark.

Indian newspapers have said that Ratan Tata is personally heading the talks with Ford. The sale of Jaguar and Land Rover to Far Eastern businesses would follow the path of MG Rover, now owned by Chinese car maker Nanjing Automobile Corporation (NAC), which is restarting production of the MG TF sports cars at Longbridge later in 2007.

Meanwhile, it is also learnt that two former Ford executives are also leading rival private equity bids for the car companies, which employ around 15,000 people at their West Midland plants in Solihull, Coventry and Birmingham. While Jacques Nasser, a Ford ex-boss is leading a bid by One Equity Partners, a private equity firm owned by JP Morgan Chase, Nich Scheele, who had served as Ford’s president and chief operating officer from 2001 until his retirement in 2005, has joined New York-based Ripplewood Holdings in its bid for the brands. Cerberus Capital Management, the US venture capital firm that bought Chrysler earlier this year, is also said to be interested in bidding.