Land Rover and Jaguar Become Firm's Latest British Brands

Two of Britain's most famous car marques, Jaguar and Land Rover, are to come under the wing of the Tata conglomerate after Ford announced yesterday that it had reached agreement to sell the two brands to the Indian business giant for $2.3bn (£1.15bn).

Tata, which owns the Anglo-Dutch steelmaker Corus and Tetley Tea, will also pay $600m into the Jaguar/Land Rover pension funds.

As part of the deal, which is expected to be completed over the next few months, Ford and Tata have struck a series of agreements under which Ford will continue to supply Jaguar and Land Rover with engines, stampings and other automotive components for a number of years. It will continue to supply technical support, including research and development, as well as financing for Jaguar and Land Rover dealers for up to a year.

Ford and Tata said they believed the arrangements would support Jaguar/Land Rover's current production plans and they did not expect any significant changes to the terms of employment for the 16,000 people who work for the two brands. Jaguar cars are built at Castle Bromwich and Halewood, while Land Rover shares Jaguar's Halewood facility and has its own plant at Solihull.

Ford's president and chief executive, Alan Mulally, who is driving through the US company's restructuring program, said: "Jaguar and Land Rover are terrific brands. We are confident they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship."

Tata's chairman, Ratan Tata, said he was pleased to add Jaguar and Land Rover to his company's automotive operation. "We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact."

Tony Woodley, the joint general secretary of the union Unite, said if Jaguar and Land Rover had to be sold then Tata was the best option.

"We would have much preferred Ford to keep the companies in the family, so to speak, especially with Land Rover being so profitable," he said. "But with the commitments Tata have given to the future of Jaguar/Land Rover and the long-term supply agreements for components, especially engines from Bridgend and Dagenham, we're obviously pleased they are in the game."

Woodley added that there was disappointment that Ford had decided not to retain a stake in Jaguar/Land Rover in the way it had done when it sold Aston Martin to a Middle East-led consortium.

Tata said it would finance the deal in the short term through a bridging loan, arranged through a small syndicate of banks, but would look to put the financing on a longer-term footing.