Ford says Tata front-runner to buy Jaguar and Land Rover
By Mathieu Robbins and Pete Harrison
Reuters
Thursday, January 3, 2008
LONDON: Ford said on Thursday India's Tata Motors was the front-runner to buy its European brands Jaguar and Land Rover, which the U.S. carmaker is selling to counter mounting debt.
"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.
"There is still considerable work to do and while no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks."
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.
Tata Steel , for example, last year bought Anglo-Dutch steelmaker Corus for 6.2 billion pounds.
Ford said in November it expected to wrap up a sale of Jaguar and Land Rover by early this year, disbanding its stable of European premium brands that has been an inconsistent performer.
Fitch Ratings said last month it estimated Ford's debt will this year have grown by more than 10.6 billion pounds since 2001, when new debt to be issued to the automakers' health care benefits trusts is included.
Ford regards Tata as a long-term owner that will invest in the units and Ford's UK labour unions backed it over its rivals in November on the grounds the workforce's best interests would be served by a partner with an established presence and background in manufacturing.
While price decides most auctions, the views of the unions and the UK count in this sale because Ford, which has other UK units and considers the country one of its larger markets, is keen to maintain good relations with both, a source familiar with the matter said.
The talks with Tata are not formally exclusive but the goal is for the companies to thrash out the final details of a deal in coming weeks, the source said.
Tata Motors, India's top vehicle maker, said it was pleased with the progress of the talks. "We hope both parties can reach an agreement in the forthcoming weeks, though these are complex discussions and there is still much work that needs to be done before that position is reached," Tata said.
The source familiar with the matter told Reuters earlier on Thursday that Ford was set to name Tata Motors as the front-runner to buy Jaguar and Land Rover.
Tata, along with Mahindra & Mahindra and U.S.-based private equity firm One Equity Partners, had emerged in November as the last bidders left in the race for the two luxury brands.
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 and Land Rover sustain in the UK, sources familiar with the matter have said.
UK union Unite, which represents Ford UK workers, said on Thursday that it wants more discussions with Ford and Tata about job security for its members.
"There are also crucial issues around wages, terms and conditions and pensions to address before any final decision is considered," said Unite's joint general secretary Tony Woodley in the statement.
(Additional reporting by Rina Chandran in Mumbai; Editing by David Holmes and Erica Billingham)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment