June 02, 2008
Tata Motors completes acquisition of Jaguar Land Rover
Tata Motors today acquired the Jaguar Land Rover business from the Ford Motor Company for a net consideration of $2.3 billion, as announced on March 26, 2008 in an all-cash transaction. Ford has contributed about $600 million to the Jaguar Land Rover pension plans.
Ratan Tata, Chairman of Tata Sons and Tata Motors, was present at the handing over ceremony at the headquarters of Jaguar Land Rover at Gaydon in the UK, along with Don Leclair, the executive vice president and chief financial officer of Ford Motor Company. Also present was Lewis Booth, executive vice president of Ford Motor Company, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover.
Commenting on the occasion, Mr Tata said, “This is a momentous time for all of us at Tata Motors. Jaguar and Land Rover are two iconic British brands with worldwide growth prospects. We are looking forward to extending our full support to the Jaguar Land Rover team to realise their competitive potential. Jaguar Land Rover will retain their distinctive identities and continue to pursue their respective business plans as before. We recognise the significant improvement in the performance of the two brands and look forward to this trend continuing in the coming years. It is our intention to work closely to support the Jaguar Land Rover team in building the success and pre-eminence of the two brands.”
Tata Motors confirmed that David Smith, the acting chief executive officer of Jaguar Land Rover, would be the new CEO of the business. Mr Smith has 25 years of experience with Jaguar Land Rover and Ford. Before returning to Jaguar Land Rover recently, as its chief financial officer, he was director, finance and business strategy, for PAG and Ford of Europe.
Mr Smith said, “We are very pleased with the association with Tata Motors. We look forward to a sustained bright future for the company and its stakeholders.”
Jaguar Land Rover has been acquired at a cost of $2.3 billion on a cash-free, debt-free basis. The purchase consideration includes the ownership by Jaguar and Land Rover, or perpetual royalty-free licences of all necessary intellectual property rights, manufacturing plants, two advanced design centres in the UK, and a worldwide network of national sales companies.
Long-term agreements have been entered into for supply of engines, stampings and other components to Jaguar Land Rover. Other areas of transition support from Ford include IT, accounting and access to test facilities. The two companies will continue to cooperate in areas such as design and development through sharing of platforms and joint development of hybrid technologies and powertrain engineering. The Ford Motor Credit Company will continue to provide financing for Jaguar Land Rover dealers and customers for a transition period. Tata Motors is in an advanced stage of negotiations with leading auto finance providers to support the Jaguar Land Rover business in the UK, Europe and the US, and is expected to select financial services partners shortly.