On This Day – Tata Motors Acquired Ford’s Jaguar, Land Rover For $2.3 Billion In 2008
Ford’s deal with Tata motors to sell Jaguar and Land Rover came after its money-losing operations in North America.
On March 26 in the year 2008, India’s Tata Motors Ltd acquired Jaguar and Land Rover from Ford Motor Co in a $2.3 billion deal. With the acquisition, Tata Motors Ltd finally got a line-up ranging from the world’s cheapest car to more expensive ones, thereby providing the company an edge over other Indian automakers like Mahindra & Mahindra Ltd, which also was aiming to strike a deal with Ford.
Post the deal, Ford finally lost its money-losing Jaguar brand and gained cash infusion at a time when the U.S. market was facing a slump, thereby aiming to bounce back from combined losses of around $15 billion over the past two years.
For the unversed, Ford had bought Jaguar for $2.5 billion in 1989 but could not make the British nameplate into a higher-volume brand. It then bought Land Rover in 2000 for
Nonetheless, with the deal, the shifting of power in the global auto industry has been achieved, with India being part of emerging markets witnessing a growth in production. Tata Motors struck the deal when other European automakers, including BMW AG or Daimler AG, too pursued Jaguar and Land Rover. But clearly, Tata Group Chairman Ratan Tata, with his Tata Motors, emerged as their most striking competitor. Tata Motors has been in the business of making locomotives after World War Two.
Coming back to Ford, with the sale out, the company disbanded its Premier Automotive Group, and only remained with its brand Volvo.
After the buyout, Tata Motors shares closed down 0.1 percent at 679.40 rupees at the Bombay Stock Exchange while Ford shares were down almost 2 percent at $5.90 at the New York Stock Exchange.
To say the least, the Tata Group, in the recent years, has made a number of overseas takeovers. Before taking over Jaguar and Land Over, Tata Group also completed the $13 billion buy of Anglo- Dutch steelmaker Corus.