Tata Motors announced it has entered into a definitive agreement with the Ford Motor Company for the purchase of Jaguar Land Rover, comprising brands, plants and intellectual property rights.
The transfer of ownership to Tata Motors is expected to close by the end of the next quarter, subject to applicable regulatory approvals. The total amount to be paid in cash by Tata Motors for Jaguar Land Rover upon closing will be approximately US$2.3 billion.
At closing, Ford will then contribute up to approximately $600 million to the Jaguar Land Rover pension plans.
Commenting on the agreement, Chairman of Tata Sons and Tata Motors, Ratan N Tata, said, “We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. 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.”
Alan Mulally, president and CEO of the Ford Motor Company, said, “Jaguar and Land Rover are terrific brands. We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship.”
As part of the transaction, Ford will continue to supply Jaguar Land Rover 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, including research and development, plus 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, which can vary by market, of up to 12 months. The parties believe these arrangements will support Jaguar Land Rover’s current product plans, while providing Jaguar Land Rover with the freedom to develop its own standalone capabilities in the future that will best serve its premium manufacturer requirements.