Mar. 26 – Making auto history yet again, Ratan Tata inked a multi-billion-dollar deal with ailing U.S. automaker Ford to buy luxury British icons Jaguar and Land Rover. Signed and seal on Tuesday the deal will be officially delivered to the press on Wednesday. Both Jaguar and Land Rover are expected to be sold to Tata Motors for US$2.3 billion.
Tata Motors is India’s top vehicles maker, controlling more than half of the country’s truck market and nearly 20 percent of its passenger car market, and is keen to expand beyond Asia. With this latest acquisition Tata motors is positioned to cater to Indians across economic stratas, placing themselves in the unusual position of making two of the world’s most prestigious brands along with its least costly cars (Nano).
Last year Tata steel engineered India’s biggest takeover yet, a $13 billion purchase of Corus Group Plc, more than double the size of the No. 2 deal, the purchase of Canada’s Novelis by Hindalco Industries in 2007.
Indian firms completed deals worth $31.4 billion in 2007, up from about $7 billion the previous year.
Before the expected deal with Ford, cross-border acquisitions announced by Indian companies in 2008 totaled $2.4 billion from 51 deals.
After the expected Tata Motors deal, the No. 2 deal this year was by Tata Chemicals which agreed to pay $1.01 billion for U.S.-based General Chemical Industrial Products Inc.
Post purchase, Tata Motors next challenge would be making sure the character of both brands – Jaguar and Land Rover isn’t lost, both in India and globally. With Indian ownership not yet an asset in the global arena, it might not be wise of Tata to ‘Indianise’ the already iconic brands.