So what if the Kohinoor diamond—once considered the ultimate symbol of Indian wealth and power—now resides with the Queen of England? On Wednesday evening, Jaguar and Land Rover, icons of British luxury, passed into Indian hands for £1.15 billion ($2.3 billion). The event was marked by a no-frills note issued by Tata Motors from its Mumbai HQ. The irony of it all wasn’t lost in either India or the UK.
With an investment of $104 billion, India is now the second largest foreign investor in Britain. And it took a company from a former colony to come to the rescue of a beleaguered British brand. In 2000, the Tatas had similarly bailed out another quintessential British brand, Tetley Tea, by acquiring the company for $432 million. Last year, in an operation marked by high drama, they mounted an aggressive bid for Anglo-Dutch steel behemoth Corus.
The JLR transaction has been a relatively tame affair. Soon after Ford Motor Company—the American owner of the brands for the last 18 years—put the brands on the block, the Tatas, Mahindra & Mahindra and Jacques Nasser, former CEO of Ford, had expressed interest.
Mahindra and Nasser backed out after Ford and the company unions indicated they were comfortable with the Tatas. What followed was mere wrangling over details. For instance, Ford Motor Finance will continue to finance buyers across the world looking to acquire Jaguar or Land Rover products for the next 12 months. Also, Ford will continue to supply key technology and components to both brands for some time to come.
In a conference call, Ravi Kant, MD, Tata Motors, said the existing management at Jaguar and Land Rover would be retained and Geoff Polites, CEO at both companies, had agreed to continue in his existing role. He also reiterated that there would be no job cuts at the manufacturing facilities in the UK.
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