Ford Motor Company has entered into a definitive agreement to sell its Jaguar Land Rover operations to Tata Motors for approximately US $2.3 billion in cash. At closing, Ford will then contribute up to approximately US $600 million to the Jaguar Land Rover pension plans.
The transaction is the culmination of Ford’s decision last August to explore strategic options for the Jaguar Land Rover business, as the company accelerates its focus on its core Ford brand and “One Ford” global transformation. The sale is expected to close by the end of the next quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals.
As part of the transaction, Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services.
In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months.
The parties believe these arrangements will support Jaguar Land Rover’s current product plans, while providing Jaguar Land Rover freedom to develop its own stand-alone capabilities in the future that will best serve its premium manufacturer requirements.