Tata purchase of British carmakers not this year
Saturday, 22 December 2007, 01:06 IST
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London: After fevered speculation this week over Tata's proposed buyout of the British carmakers Jaguar and Land Rover, a person close to the deal said Friday a decision was only being expected in the New Year. "We don't expect anything to happen between now and the New Year," said the source. Key members of the Jaguar and Land Rover senior management are expected to be on Christmas leave beginning this weekend, the source told IANS. Speculation on the deal, in which the Indian multinational Tata Group is the frontrunner, reached fever pitch this week after the Birmingham Post, a newspaper based in the midlands region that is also home to Jaguar and Land Rover plants, reported that Tata were expected to be announced the winning bidders Friday. However, the Financial Times reported Friday that there were several sticking points that could yet undo the deal. Detailing the process, the paper said the winner would have a period of exclusivity to hammer out agreements. Ford is expected to take the successful preferred bidder before the Jaguar and Land Rover pension trustees for further negotiations. They would then begin the complicated negotiations required to reach a final arrangement. The successful bidder would have to sign an estimated 40 contracts as part of the takeover, ranging from engine production to the operation of information technology systems. There could be several more sticking points that could undo a deal, such as the cost of complying with stricter emissions regulations in Europe and whether the successful bidder would be permitted to use intellectual property belonging to Jaguar and Land Rover in other parts of the group. This would be tricky for Tata Motors, which is expected to reap significant technology transfer benefits from the takeover, the newspaper said. Other reports Friday said Tata was understood to have been given significant access to the management, leaving rival bidders to conclude that the Indian group is in the lead. Ford, which bought Jaguar in 1989 for $2.5 billion, and Land Rover in 2000 for $2.73 billion, is selling off the two iconic British luxury brands to recoup losses made in its American operations. Ford lost $12.6 billion last year. Tata is the leader in a field of three bidders, the other two being fellow Indian carmaker Mahindra and Mahindra and buyout specialists One Equity, which is headed by former Ford chief executive Jacque Nasser. Offers are said to be around the $2-billion mark.
Source: IANS
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