After much negotiating, Ford Motor should finally sell its prized UK luxury brands Jaguar and Land Rover to India's Tata Motors next week, according to sources close to the deal.
LONDON, March 18 (Reuters) - Ford Motor Co could announce
the sale of its UK luxury brands Jaguar and Land Rover to
India's Tata Motors in the middle of next week, after Tata
secured funding for the deal, sources close to the deal said on
"It's pretty much there," said a source close to the deal.
"Dates can come and go, but it could be some time around March
Tata has signed a deal to receive a $3 billion one-year
bridge loan from Citigroup and JPMorgan to finance the roughly
$2 billion purchase of Jaguar and Land Rover, sources familiar
with that deal also said on Tuesday.
Tata is believed also to need money to help pay for
manufacturing the world's cheapest car, the Nano, that it will
launch in the second half of the year.
An announcement of the Jaguar/Land Rover deal had been
expected at the start of this month, but was delayed as the two
firms discussed their future relationship, including technology
sharing and Ford's provision of engines and body parts for the
"They've made good progress on getting through the paperwork
and it could well be soon after the Easter holidays," said the
second source. "I don't think there's been a lot of haggling
TOUGH DEBT MARKET
All Jaguar and Land Rover's petrol engines are built in a
Ford plant in South Wales, supporting hundreds of jobs there.
Diesel engines come from Ford's factory in Dagenham, east
The two brands are estimated to be worth around $2 billion.
The Indian firm could raise up to $4 billion on domestic and
overseas debt markets, based on its previous announcements and
But it faces a tough debt market environment as a global
financial crisis has raised the premiums demanded by investors,
especially from riskier Asian issuers.
Tata, India's top vehicle maker, has been in talks with Ford
since it was chosen as the front-runner to buy Jaguar and Land
Rover a few days into 2008.
Union negotiator Dave Osborne told Reuters his Unite union
was reasonably happy with the deal, after Tata ruled out selling
on Jaguar or building Land Rovers in India, and said it would
keep the supply agreement with Ford and the UK engineering and
The only objective the union had failed to secure was
getting Ford to keep a minority stake, he added.
Osborne also said that as part of the deal Ford would fill a
deficit in workers' pension plans, which media reports put at
250 million pounds ($504 million) to 300 million.
A Ford spokesman said the deal had encountered no major
roadblocks and was still expected in early 2008.
"Discussions are still going on," said a Tata spokesman. "We
have nothing more to add."
Date created : 2008-03-18