Tata Conducting Due Diligence on Jaguar and Land Rover?

By Brendan Moore

07.31.2007

The Hindustan Times of India reported on Saturday (GMT) July 28 that Tata Motors Ltd. had a due diligence team in London, ready to begin the analysis required for an acquisition of Jaguar and Land Rover from Ford. Unidentified sources close to the effort state that due diligence did indeed kick off the morning of Monday, July 30. The Hindustan Times stated that Arun Gandhi, a director of Tata, is leading the negotiation team. Citigroup is believed to be advising Tata on the deal. Both Ford and Tata refused comment.

Ford put Jaguar and Land Rover up for sale a couple of months ago, and is believed to have Goldman Sachs and Morgan Stanley advising on the deal. Ford two weeks ago received what was believed to be seven bids for the two brands. Besides Tata, other known bidders probably include Mahindra and Mahindra, Tata’s main rival in India, and the American buy-out firms of Ripplewood and TPG.

Auto industry analysts have estimated the value of Jaguar and Land Rover at anywhere between $3 billion and $7 billion USD, depending on whom you ask and when. Almost all that projected value currently resides within the Land Rover brand as Jaguar has been posting steep losses recently and is sometimes derisively referred to within Ford as “The English Patient” because of its sickly finances. Ford is believed to have paired Jaguar with Land Rover to any potential buyers so as to ensure that Jaguar is successfully sent off to a new owner.

It is widely thought that Volvo, another Ford subsidiary, is also currently being shopped to potential buyers as well. Ford is desperate for more cash in order to continue carrying out a massive restructuring of the North American core operations.

If Tata (or Mahindra, for that matter) purchases Jaguar and Land Rover, the irony would be thick enough to cut with a knife. India, a former British colony for over two hundred years, would own Jaguar and Land Rover, two of England’s historic and iconic brands.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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4 Comments

  1. Maybe the Indians can do a better job with Jaguar than the Americans did.

  2. Wasn’t America also previously part of the British Empire, so really there wouldn’t be any difference if an Indian firm owned Them to an American. I wouldn’t really call Land Rover Historic either, it’s realativley young in comparison to most car companies.

  3. anonymous, the differences are this: Brits consider Ford to be a British company (even though they’re not) because they’ve been there so long and they produce a lot of cars there, and, while America was also a British colony, it was for a short time and also was a long time ago, both of which don’t apply in the case of India. And certainly, the Anglo-American relationship is a lot different than the Anglo-Indian relationship, wouldn’t you say?

    Land Rover isn’t as old as most car companies, but it’s been around a pretty long time, and it is one of the companies that shouts out “we’re English!”. Jaguar needs no explanation.

    I agree with the author – Indian ownership of these two companies would be important in a national psyche way for both England and India. I am an Indian living in England, so I see both sides.

  4. Anyone who is Indian, and anyone who is English knows that the English do not consider the U.S. and India as equals. It is mad to pretend this, and, yes, such an acquisition would have some minor and temporary importance from a psychological stance to both Britain and India.

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