Page last updated at 14:57 GMT, Monday, 2 June 2008 15:57 UK

Ford completes 1.7bn Jaguar deal

Jaguar, Land Rover logos
While Land Rover is a profitable business, Ford lost millions on Jaguar.

Ford has completed the sale of its Jaguar and Land Rover businesses to Indian conglomerate Tata in a deal valued at 1.7bn.

The companies are being sold for 1.15bn with Ford paying 600m into the pension fund of the luxury brands.

The negotiations started last June and the deal was announced in March.

Ford is selling the firms to try and boost overall performance. Land Rover remains profitable but Ford has never made money from its Jaguar investment.

The price tag is about half the amount Ford originally paid for the marques, leading some analysts to argue that the purchase was a mistake.

'Competitive potential'

"This is a momentous time for all of us at Tata Motors," said Tata chairman Ratan N. Tata.

"Jaguar and Land Rover are two iconic British brands with worldwide growth prospects."

"We are looking forward to extending our full support to the Jaguar Land Rover team to realize their competitive potential."

The current acting chief executive of the two businesses, David Smith, will take the top job having taken on the role after the death of former boss Geoff Polites. Ford will continue to supply Jaguar and Land Rover for differing periods with engines, stampings and other car components, in addition to a variety of technologies.

In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period of up to 12 months.

Jaguar and Land Rover employ about 16,000 staff at UK plants in the West Midlands and Merseyside.

Ford has been forced to sell the two companies in order to concentrate on its loss-making core US car business, which it hopes to turn around in the next two years.

The two companies have sites at Solihull and Castle Bromwich in the West Midlands, Whitley in Coventry, Gaydon in Warwickshire and Halewood on Merseyside,

It sold its Aston Martin marque to a UK-led investment consortium last year.


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