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February 1, 2008 |
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TATA MOTORS: May Pay More for Jaguar and Land Rover, Report Says Tata Motors Ltd may have to shell out more to purchase Ford Motor Co.'s Jaguar and Land Rover as the brands' stable, Premier Automobile Group, posted a US$504-million profit before tax, The Economic Times reports. Aside from the two Ford brands, PAG also houses Volvo. Tata Motors became the front-runner bidder for Ford's Jaguar and Land Rover when the U.S. carmaker announced on Jan. 3, that it has entered into “focused negotiations at a more detailed level” with Tata. Tata Motors outbid Mahindra & Mahindra in collaboration with buyout firm Apollo; and One Equity Partners LLC. As reported yesterday by the Troubled Company Reporter-Asia Pacific, Tata Motors and Ford are closing in on a deal for the sale. The Times, citing an unnamed source, anticipates an announcement of an agreement as early as next week to as late as March. Since the negotiations are not yet over, Ford could push for better valuations now that PAG has become profitable, the Times says, citing auto consultants and analysts. PAG's pre-tax 2007 profit is a huge improvement from the U$344-million loss in 2006, the news agency points out. Ford spokesperson John Gardiner attributed the turnaround to Land Rover and Jaguar. “Jaguar and Land Rover have been solidly profitable in each quarter of 2007, but Volvo made a loss,” Mr. Gardiner told the news agency. Tata Motors reportedly made a US$2-billion bid for the two luxury brands. According to The Times, auto analysts have unanimously maintained that Tata's bid price is too high. India's largest automobile company, Tata Motors Limited -- http://www.tatamotors.com/ -- is mainly engaged in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company's operating segments consists of Automotive and Others. In addition to its automotive products, it offers construction equipment, engineering solutions and software operations. Tata Motors has operations in Russia and the United Kingdom. * * * As reported in the TCR-Europe on Jan. 8, 2008, Moody's Investors Service placed the Ba1 Corporate Family Rating of Tata Motors Ltd on review for possible downgrade. |
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