India’s Tata conglomerate today looked to be in pole position to complete the £1bn (€1.4bn) acquisition of Ford’s Jaguar and Land Rover car marques.
The tea and steel maker is to be named as favoured suitor for two of Britain’s most famous car names after a six-month takeover tussle.
A deal has reportedly been agreed with Tata, with official confirmation due today or early in the new year, newspaper reports said.
Car giant Ford whittled the bidders for the luxury marques down to three last week, with fellow Indian car firm Mahindra and US private equity firm One Equity also in the running.
The US group put the two car brands up for sale earlier this year as part of a shake-up to shore up flagging profits after posting its biggest loss in its 103-year history last year.
Ford said it hoped to conclude the sale by early next year, but the pension deficit at the two car brands is thought to have been an major issue.
With Ford likely to retain a significant minority stake, the value to the US company of any sale could be more than swallowed up by an estimated £1bn (€1.4bn) pension deficit.
A successful deal by Tata would mark the first takeover of a major Western car group by an Indian firm.
Earlier this year the group demonstrated its growing strength when it bought steelmaker Corus for £4.3bn (€5.9bn), while the firm also owns Tetley Tea in the UK.
Car workers union Unite said Tata Group was its preferred choice, given its solid manufacturing background.
Tata is also said to be keen to keep all three of Jaguar and Land Rover’s UK factories, at Solihull and Castle Bromwich in the Midlands, and Halewood, Merseyside – which employ more than 13,000 workers.
Ford bought Jaguar in 1989 for £1.6bn (€2.2bn) and paid £1.7bn (€2.3bn) for Land Rover in 2000.
It sold Aston Martin for £450m (€621m) in March and is also conducting a strategic review of Volvo in order to improve the brand’s financial performance.