Tata Motors completes acquisition of Jag, Land Rover
MUMBAI (Reuters) - Tata Motors Ltd (TAMO.BO) (TTM.N), India's top vehicle maker, said on Monday it had completed the $2.3 billion acquisition of Jaguar and Land Rover, adding the luxury brands to a line-up that also includes the low-cost Nano.
The all-cash deal, which was agreed in March, includes all necessary intellectual property rights, manufacturing plants, two advanced design centers in the UK and a worldwide network of sales companies, Tata Motors said in a statement.
The brands were bought from Ford Motor Co (F.N), which has contributed about $600 million to the Jaguar and Land Rover pension plans, and long-term agreements have been entered into for the supply of engines, stampings and other components.
"Jaguar and Land Rover are two iconic British brands (and) will retain their distinctive identities and continue to pursue their respective business plans as before," Chairman Ratan Tata said in the statement.
"We recognize the significant improvement in the performance of the two brands and look forward to this trend continuing in the coming years."
David Smith, the acting chief executive of Jaguar and Land Rover, will be the new chief executive.
Tata Motors last week said it would raise up to $1.7 billion from three rights issues to help fund the acquisition. On completion of these issues, it would also raise a further $500-$600 million from an overseas equity issues.
The company is scheduled to start selling the Nano, the world's cheapest car priced at just above $2,500, in India later this year.
Other areas of transition support from Ford include IT, accounting and access to test facilities. The companies will also cooperate in areas such as design and development through sharing of platforms and joint development of hybrid technologies and powertrain engineering, Tata Motors said.
The Ford Motor Credit Company will continue to provide financing for Jaguar Land Rover dealers and customers for a period, and Tata Motors said it was in advanced negotiations with auto finance providers in the UK, Europe and the United States.
Tata Motors, India's top bus and truck maker and No. 3 car maker, has sought to expand its presence in the global markets through alliances and acquisitions in recent years.
It bought South Korea's Daewoo Commercial Vehicles in 2004, and has a minority stake in Spanish bus maker Hispano Carrocera.
It also has ventures with Thailand's Thonburi for pick-up trucks, and with Italy's Fiat FIA.MI for manufacturing, distribution and technology, as it gears up for tougher competition at home.
Indian firms have announced overseas mergers and acquisition deals worth nearly $10 billion so far this year, Thomson Reuters data showed, including a $2.6 billion deal at the weekend by Sterlite Industries STRL.BO for bankrupt copper miner Asarco.
Ahead of the news of the deal's completion, shares in Tata Motors, worth about $5.1 billion, ended down 2.4 percent at 562.95 rupees. It shares have fallen 24 percent in 2008, compared to a 21 percent decline on the main share index .BSESN.
(Editing by John Mair)