It appears that Ford (NYSE: F) may finally have a buyer for Jaguar and Rover. The Wall Street Journal reports that Indian conglomerate Mahindra & Mahindra will tie up with private equity operation Apollo Management to buy the car units. Not all of the roadblocks to the deal have been pushed aside. The Journal writes "Labor leaders in the United Kingdom are seeking assurances that the brands' new owner would protect jobs and factories in the country."
Ford paid a little over $5 billion for the two units, and industry estimates put their current value at $1.5 billion. So the sale would mark another step in the humiliating downsizing of Ford.
The probability of a sale also raises an interesting question. If Ford's management is so much better than it was a year ago and it has a much better labor deal with the UAW, why sell the units at all? If a company in India can improve the fortunes of the two brands, why can't Ford?
It is not too late for the No.2 U.S. car company to work on fixing the units itself. The poor results of Jag and Rover are already in the stock. Improving their results ought to help shareholder value.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
11-21-2007 @ 11:21AM
jpdr1100 said...
Ford has its hands full getting its own product lines in shape. Land Rover and Jag are distractions it can't afford.
If their poor results are already cooked into the share price, their sale should cause a rise.