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Completion of Jaguar Land Rover Sale Imminent as Ford Decides How to Invest Monies
24 Mar 08
The sale of Ford Motor Company’s Jaguar and Land Rover brands to India’s Tata Motors will be completed this Wednesday (26 March) according to India’s Economic Times newspaper. The report quotes a trade-union official as saying that Wednesday is when the Memorandum of Understanding (MoU) between Ford and Tata will finally be signed. Meanwhile, Ford Chief Executive Officer (CEO) Alan Mulally has been quoted as saying that the proceeds of the sale “will be invested on [Ford’s] quality and productivity and new product development for Ford”. Mulally was speaking at the Morgan Stanley Automotive Conference in New York, as reported by Automotive News.
Significance: This acquisition process has been characterised by delays; its completion has already been put back several times, therefore, whether or not the MoU is signed this week remains to be seen. The value of the deal has been kept secret, but Tata is believed to be paying Ford somewhere between US$1.5 and US$2 billion for the two brands. When the sale is eventually finalised, it will be a bittersweet moment for Ford. On the one hand, the two brands are looking stronger than ever, thanks to the investments Ford has made in them. On the other hand, the unprofitable U.S. car-maker desperately needs to avoid further hefty investment costs linked to Jaguar and Land Rover’s new model development and to the lowering of their average emissions to comply with future European legislation.
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