Tata completes Jaguar, Land Rover acquisition
Automotive News Europe
MUMBAI, June 2 (Reuters) -- Tata Motors, India's top vehicle maker,
said today it had completed the $2.3 billion acquisition of Jaguar and Land
Rover, adding the luxury brands to a line-up that also includes the low-cost
Nano. The all-cash deal, which was agreed in March, includes all necessary intellectual
property rights, manufacturing plants, two advanced design centers in the UK
and a worldwide network of sales companies, Tata Motors said in a statement.
The brands were bought from Ford Motor, which has contributed about
$600 million to the Jaguar and Land Rover pension plans, and long-term agreements
have been entered into for the supply of engines, stampings and other components.
"Jaguar and Land Rover are two iconic British brands (and) will retain
their distinctive identities and continue to pursue their respective business
plans as before," Chairman Ratan Tata said in the statement.
"We recognize the significant improvement in the performance
of the two brands and look forward to this trend continuing in the coming years."
David Smith, the acting CEO of Jaguar and Land Rover, will be the new chief
executive. Tata Motors last week said it would raise up to $1.7 billion from
three rights issues to help fund the acquisition. On completion of these issues,
it would also raise a further $500-$600 million from an overseas equity issues.
The company is scheduled to start selling the Nano, the world's
cheapest car priced at just above $2500, in India later this year.
Transition support
Other areas of transition support from Ford include IT, accounting
and access to test facilities. The companies will also cooperate in areas such
as design and development through sharing of platforms and joint development
of hybrid technologies and powertrain engineering, Tata Motors said. The Ford
Motor Credit Company will continue to provide financing for Jaguar Land Rover
dealers and customers for a period, and Tata Motors said it was in advanced
negotiations with auto finance providers in the UK, Europe and the United States.
Tata Motors, India's top bus and truck maker and No. 3 carmaker,
has sought to expand its presence in the global markets through alliances and
acquisitions in recent years. It bought South Korea's Daewoo Commercial Vehicles
in 2004, and has a minority stake in Spanish bus maker Hispano Carrocera. It
also has ventures with Thailand's Thonburi for pick-up trucks and with Italy's
Fiat for manufacturing, distribution and technology, as it gears up for tougher
competition at home.
Indian firms have announced overseas mergers and acquisition deals
worth nearly $10 billion so far this year, Thomson Reuters data showed, including
a $2.6 billion deal at the weekend by Sterlite Industries for bankrupt copper
miner Asarco. Ahead of the news of the deal's completion, shares in Tata Motors,
worth about $5.1 billion, ended down 2.4 percent at 562.95 rupees. It shares
have fallen 24 percent in 2008, compared to a 21 percent decline on the main
share index.