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Tata Motors completes JLR buy Tata Motors on Monday acquired the Jaguar Land Rover (JLR) businesses from Ford Motor for a net consideration of $2.3 billion. The luxury brands are part of a line-up that includes the low-cost Nano, which will be rolled out this year. Ford has contributed about $600 million to the JLR pension plans. The all-cash deal, which was signed in March 2008, has come to symbolise India Inc’s coming of age and its global ambitions. Despite tight credit markets, Tata Motors has been able to achieve financial closure for the $2.3-billion deal. The transaction includes the necessary intellectual property rights, manufacturing plants, two advanced design centres in the UK and a worldwide network of sales companies, Tata Motors said in a statement. The fund-raising involved a consortium of 15 banks, including banking majors from Asia, the UK and Singapore, sources said. Tata Motors confirmed that David Smith, the acting JLR CEO, would be the new CEO of the business. Mr Smith has 25 years’ experience with JLR and Ford. Before recently returning to JLR as CFO, he was director of finance and business strategy at Premier Automotive and Ford of Europe. The bridge loan, amounting to $3 billion, is being underwritten by eight banks — State Bank of India, Citibank, JP Morgan, Standard Chartered, BNP Paribas, Tokyo Mitsubishi, Mizuho Financial Group and ING. The bridge loan covers the $2.3-billon acquisition and other funding requirements. The rest will fund working capital requirements of JLR and could even fund some of Tata Motors’ own expansion plans, though there is no confirmation of the latter. Ratan N Tata, chairman of Tata Sons and Tata Motors, along with Don Leclair, the executive vice-president & CFO and Lewis Booth, EVP of Ford Motor company were present at the handing over ceremony at the UK-based Gaydon head quarters of JLR. “We will extend our full support to the JLR team to realise their competitive potential. JLR will retain their distinctive identities and continue to pursue their respective business plans as before,” Mr Tata said in a statement. “While we recognise the significant improvement in the performance of the two brands, we are looking forward to this trend continuing in the coming years,” added Tata. “We look forward to a sustained bright future for the company and its stakeholders,” Mr Smith said. Tata Motors is quite certain it can bring the brands back to profitability after it recently saw the new model lines and planned product cycles. Last week, Tata Motors said it would raise up to Rs 7,200 crore from three rights issues to help fund the acquisition. This would replace the bridge loans. On completion of these issues, it would also raise a further $500-$600 million from overseas equity issues. Long-term agreements have been entered into for supply of engines, stampings and other components to Jaguar Land Rover. Other areas of transition support from Ford include IT, accounting and access to test facilities. The two companies will continue to co-operate in areas such as design and development through sharing of platforms and joint development of hybrid technologies and power train engineering. The Ford Motor Credit Company will continue to provide financing for Jaguar Land Rover dealers and customers for a transition period. Tata Motors is in advanced stage of negotiations with leading auto finance providers to support the Jaguar Land Rover business in the UK, Europe and the US, and is expected to select financial services partners shortly.