UPDATE 5-Tata to buy Ford's Jaguar, Land Rover for $2.3 bln

(Adds deal advisers, updates share price)

By Sumeet Chatterjee and Kevin Krolicki

MUMBAI/DETROIT, March 26 (Reuters) - India's Tata Motors Ltd (TAMO.BO: Quote, Profile, Research)(TTM.N: Quote, Profile, Research) announced a $2.3 billion deal on Wednesday to buy Jaguar and Land Rover from Ford Motor Co (F.N: Quote, Profile, Research), a transaction that gives the Indian automaker a line-up ranging from the world's cheapest car to some of its more expensive.

For Tata, which plans to launch the ultra-cheap $2,500 Nano or "People's Car," the addition of the profitable Land Rover brand provides an edge against Indian rival Mahindra & Mahindra Ltd (MAHM.BO: Quote, Profile, Research), which had also pursued a deal with Ford.

Ford, for its part, gets to shed the money-losing Jaguar brand and gains a cash infusion at a time when the U.S. market is slumping and it is attempting to bounce back from combined losses of more than $15 billion over the past two years.

The sale price is roughly 40 percent of what Ford paid for the two brands. Ford acquired Jaguar for $2.5 billion in 1989, but failed to turn the British nameplate into a higher-volume brand. Ford paid $2.75 billion for Land Rover in 2000.

The deal also underscores the shifting balance of power in the global auto industry, where India and other emerging markets are expected to account for almost all of the growth in production over the next five years. None of the established European automakers, including BMW AG or Daimler AG (DAIGn.DE: Quote, Profile, Research), pursued Jaguar and Land Rover.

They face a new competitor in Tata Group Chairman Ratan Tata, a jet-flying businessman, and his Tata Motors, India's No. 3 car maker and a unit of the far-flung Tata conglomerate that got its start making locomotives after World War Two.

Ford will contribute up to $600 million to Jaguar and Land Rover pension plans after the closing of the deal, expected in the second quarter. Ford will also continue to supply engines and related components, while providing financing for dealers for up to a year, both companies said. Ford will net about $1.7 billion, in line with expectations.