If you're thinking of buying a Jaguar and Land Rover, you'll be purchasing an Indian car. Tata Motors has closed its $1.7 billion acquisition for these assets from Ford Motor Company (NYSE: F), which can certainly use the cash (the firm recently announced it won't hit profitability in 2009).
Actually, Ford purchased Jaguar in 1989 for $2.5 billion and acquired Land Rover in 2000 for $2.7 billion. In other words, the deals didn't work out so well.
Of course, Tata thinks it will have better luck. After all, the firm is picking up strong brands -- at a reasonable valuation. What's more, the acquisition will jumpstart Tata's entry onto the global stage.
Although, there are definitely challenges. No doubt, it's not easy to deal with the commodities inflation, such as with steel and aluminum.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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6-02-2008 @ 8:21PM
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