Indian industrial giant Tata looks set to get preferred bidder status in the battle to buy the Jaguar and Land Rover car marques from American owner Ford, it was reported today.
Ford, which said last month that it hoped to conclude the £1 billion sale of the two luxury brands by early next year, is set to announce that Indian firm Tata is the favoured suitor within the next two weeks.
Speculation has been growing that Tata – which earlier this year bought the Corus steel business – has taken pole position in the six-month takeover tussle.
It is understood Ford whittled the bidders down to three last week, with Tata competing against fellow Indian car firm Mahindra and US private equity firm One Equity. If Tata is confirmed as the preferred bidder, the group will enter detailed negotiations with Ford, and a price for the deal agreed – marking the first takeover of a Western car group by an Indian firm.
Tata is also said to be keen to keep all three of Jaguar and Land Rover’s UK factories, at Solihull and Castle Bromwich in the West Midlands and Halewood on Merseyside – which would get a definite thumbs-up from the unions.
But the pension deficits of the two car brands could be an issue, because with Ford likely to retain a significant minority stake the value to the US owner of any sale could be more than swallowed up by the estimated £1 billion pension shortfall.
Ford hoisted the for sale signs for Jaguar and Land Rover earlier this year as part of a massive shake-up to shore up flagging profits after it posted the biggest loss in its 103-year history last year.
However, last month the group reported a narrower quarterly loss of around £190 million compared with some £2.6 billion a year earlier.
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