Ford declares Tatas front-runner for Jaguar, Land Rover brands

The Tatas have moved one step closer to acquiring Jaguar and Land Rover with Ford Motor Co of US on Thursday...

The Tatas have moved one step closer to acquiring Jaguar and Land Rover with Ford Motor Co of US on Thursday announcing them as the front-runner to buy the legendary European models, Jaguar and the Land Rover. Besides Tata Motors, Mahindra & Mahindra and US-based private equity firm One Equity Partners had emerged in November as the last bidders left in the race for the two luxury brands. “We are pleased by the progress in the discussions to date and very positive about the prospects of this business going forward,” a Tata spokesperson said in Mumbai.

An acquisition by Tata would represent the latest instance of an Indian company buying a high profile European industrial target, as companies on the subcontinent flex their financial muscle to expand abroad and enter new markets. Tata Steel had last year bought Anglo-Dutch steelmaker Corus for £6.2 billion ($12.3 billion).

“Ford is committed to focused negotiations at a more detailed level with Tata Motors concerning the potential sale of the combined Jaguar/ Land Rover business,” said Lewis Booth, Ford executive vice president with responsibility for Europe. The Ford announcement has come 10 days ahead of the Auto Show in New Delhi where Tata Motors is expected to unveil its much-awaited small car.

The three final bidders have spent recent months locked in talks with Ford, the unions and the British government, which is keen to safeguard the manufacturing jobs Jaguar/Land Rover sustain in the UK.

“We have said for some time that we are interested in the Jaguar and Land Rover business,” the Tata official said. “We can confirm that we have had positive discussions so far with Ford concerning the possible purchase of Jaguar/Land Rover and we are now entering a period of more focused and detailed negotiations with Ford.”

Though the Tatas are the front-runners, the deal still has a long way to go. “We hope both parties can reach an agreement in the coming weeks, though these are complex discussions and there is still much work that needs to be done before that position is reached,” a Tata spokesperson pointed out.

Ford Motor — the number two US carmaker — acquired Jaguar for $2.5 billion in 1989 and Land Rover for $2.75 billion in 2000 but wants to sell them off by early 2008 as it wants to concentrate on its North American operations, which contributed heavily to a record $ 12.6 billion loss in 2006