by BW Staff and the Associated Press
India's Tata Motors (TTM) will be named on Dec. 21 as the winning bidder in the auction for Jaguar and Land Rover, according to a report in Britain's Birmingham Post newspaper. Tata will pay £1 billion, or about $2 billion, for the two Ford Motor (F) luxury auto brands, said the newspaper, which is based near Jaguar and Land Rover's home in the British midlands.
Ford spokesman Mark Truby said the company plans no announcements regarding a sale of the prestigious British brands. He said the U.S. automaker is still on track to announce the sale of Jaguar and Land Rover early next year.
Tata is vying with another Indian automaker, Mahindra & Mahindra (MAHM), as well as U.S. private equity firm One Equity Partners, for the units. Earlier this month those companies had submitted bids that ranged from $1.5 billion to $2 billion, said one person involved in the talks, who spoke on the condition of anonymity because they are confidential.
Selling Off Marques
Cash-hungry Ford, which lost $12.6 billion last year but earned $88 million in the first nine months of 2007, has been looking to sell Jaguar and Land Rover. It has mortgaged its assets to borrow money to stay operating and expects to burn up $12 billion to $14 billion until 2009, when it plans to return to sustained profitability. Jaguar and Land Rover have been hit by unfavorable exchange rates and high production costs in Britain.
Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000, joining them with Aston Martin and Volvo to form its Premier Automotive Group. Ford has not said how much it wants for the combined units.
Earlier this year Ford completed the sale of its controlling stake in Aston Martin for $931 million in cash and preferred stock. Ford has said it plans to keep Volvo for now, fixing its cost structure and making it a more premium brand.