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Desi Tata snaps up Jaguar, Land Rover

MUMBAI — In one of the most astounding U-turns witnessed in the global automotive industry, a company from India – a nation which till recently produced antiquated models of cars – yesterday grabbed two iconic British models from American auto major Ford.

India’s multi-billion-dollar Tata group (market capitalisation: $56.52 billion) which has interests spanning automobiles to luxury hotels to steel, yesterday announced the acquisition of the two venerable British auto brands from Ford Motor Company, the world’s third largest automaker, for $2.3 billion.

“We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business,” said Ratan N. Tata, chairman, Tata Sons and Tata Motors, who last year stunned the international world of business by acquiring Anglo-Dutch steelmaker Corus for $12.9 billion.

“We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact.”

Tata, 70, has been among a group of Indian tycoons who have been on an acquisition spree around the globe, spending billions of dollars in picking up Western companies. Tata’s bid to acquire Orient Express Hotels (in which it is one of the largest shareholders) was recently spurned by the US-based luxury hotel chain operator on specious grounds.

Responding to a letter by Paul White, president and chief executive of Orient Express – which was dubbed as ‘racist’ in India – the Tata group pointed out that its Taj Hotels “is a proud Indian company, and it will persevere with its global expansion strategy. Indian companies will continue to play a meaningful role in the ongoing global economic integration. Enterprises and individuals must adapt to these fundamental economic changes, those with a fossilised frame of mind risk being marginalised.”

The ‘definitive agreement’ that Tata Motors signed yesterday with Ford Motor Company related to the purchase of the brands, plants and intellectual property rights of Jaguar and Land Rover.

Tata Motors will pay $2.3 billion in cash for the two brands. Ford, which bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.73 billion in 2000, will also contribute up to $600 million to the Jaguar Land Rover pension plans. The American auto major has reported losses of over $15 billion over the past two years.

“Jaguar and Land Rover are terrific brands,” said Alan Mulally, president and CEO, Ford Motor Company. “We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship.” The deal has won the backing of trade unions in the UK and also of the British government.