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Ford says Tata to Jaguar and Land Rover

By Samantha Stevens, 08 May 2009 Industry

Ford says Tata to Jaguar and Land Rover

The Americans are ready to sell, and it's an Indian company that leads the bidding war for the two famous British marques.

Before Christmas, Automotive News reported that three key bidders remained: Tata Motors, Mahindra & Mahindra, and a private US equity firm called One Equity Partners. In early December, all three companies submitted tenders to Ford, with one anonymous source telling Businessweek that the bids ranged from AU$1.7 billion to AU$2.3 billion.

The strong Tata enterprise is rumoured to be Ford's preferred bidder.

The Tata Group comprises of almost 100 companies covering information systems and communications; engineering; materials; services; energy; chemicals and consumer products, with a vested interest in both commercial and passenger vehicles through its Motor sector.

Ford spokesman Mark Truby has publicly stated that no announcement will be made about the ownership of Jaguar and Land Rover until early in the New Year, though the papers claim otherwise.

The Birmingham Post - the local rag nearest to Jaguar's Midlands home - has speculated that Tata will pay as much as £1 billion (AU$2,285,850,000) for the two companies, and that the deal is sealed.

This would be quite the cash cow for Ford, which has struggled to recoup its multi-billion dollar losses in recent years, and will not be operating in the black until at least 2010.

Unfortunately for Ford, it originally acquired Jaguar and Land Rover for more than AU$2.8 billion each back in 1989 and 2000.

In June this year, Ford flogged Aston Martin for £479,000 (AU$1,094,500) in cash and stocks. Only one satellite in the Premier Automotive Group remains - Swedish marque Volvo, which Ford is attempting to reposition in the marketplace as a more premium brand.

For now, Ford wants to wash its hands of the Brits, their high production costs and their adverse exchange rates - and is set to gain some much-needed relief from both the sale, and the end of the sale speculation.