Dearborn, Michigan – The Ford Motor Company has announced that it has entered into a definitive agreement to sell its Jaguar Land Rover operations to India-based Tata Motors. Tata will pay approximately US$2.3 billion in cash, and at closing, Ford will contribute up to approximately US$600 million to the Jaguar Land Rover pension plans.
The transaction is the culmination of Ford’s decision last August to explore options for the business, as the company accelerates its focus on its core Ford brand. The sale is expected to close by the end of the next quarter.
“Jaguar and Land Rover are terrific brands,” said Alan Mulally, president and CEO of Ford. “We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all.”
As part of the transaction, Ford will continue to supply the company for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford has also committed to provide engineering support, research and development, information technology, accounting and other services.
In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period of up to twelve months, depending on the market. The two companies do not anticipate any significant changes to Jaguar Land Rover employees’ terms of employment on completion. The companies’ employees, trade unions and the U.K. government have been kept informed of developments as the sale process progressed, and have indicated their support for the agreement.
“We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business,” said Ratan N. Tata, chairman of Tata Sons and Tata Motors. “We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business.”