Ford Sells Land Rover and Jaguar to Tata
NEW DELHI — Tata Motors, part of India’s fast-growing Tata Group, is buying Jaguar and Land Rover from the Ford Motor Company for $2.3 billion.
The purchase price is more than the market expected but still about half what Ford originally paid for the brands several years ago. The long-awaited deal, which was announced Wednesday, also carries a painful payout for Ford: after the sale closes, which is expected midyear — Ford will give Tata another $600 million to make up for shortfalls in the two brands pension plans. Tata Group, one of India’s largest conglomerates, has been on an overseas acquisition spree, buying everything from tea and coffee companies to steel manufacturers. Other Indian companies are also considering overseas acquisitions, as a weak dollar coupled with strong domestic growth make takeovers attractive, particularly in the United States.
But much more interesting is the Times of India’s celebratory sidebar:
From cars for [100,000 rupees] to [10 million rupees], Tata makes them all
… Two months ago, Tata Motors earned the distinction of becoming the world’s cheapest car maker when it unveiled Nano – an affordable family car that will begin selling for [100,000 rupees] or nearly USD 2,500 (ex-showroom) later this year. …
But this is not the first time that Tatas are snapping up a British brand. In January 2007, Tata Steel acquired Anglo-Dutch steel maker Corus, a company that earned four times more revenue than the Indian buyer.
Although Tatas showed class all the way, they have had to contend with insults be it when they bid for Jaguar-Land Rover or hotel chain Orient-Express.
“I don’t believe the US public is ready for ownership out of India for a luxury-car brand such as Jaguar…,” Ken Gorin, the head of Jaguar’s American dealers, had said during the course of Tata’s bid for Ford’s British marques.
However, Tatas have shown the world that they are not the ones to be cowed down by such paradoxical statements by people in the West, whose companies have increasingly been moving jobs to the East to save costs.
Can you imagine how this story would be played in an American newspaper if the tables were turned and a U.S. firm was buying a couple of iconic brands from a struggling Indian company? Every professor of postcolonial studies at Columbia would be writing an op-ed about how domineering American capitalism is victimizing the poor Indians. There would be dire predictions of cutbacks (despite assurances to the contrary), &c. But the Indian papers have the audacity to actually present the success of their fellow countrymen as admirable.