Tata to announce £1bn deal to buy Jaguar and Land Rover from Ford

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The Independent Online

The Jaguar and Land Rover brands will be sold by their American owners, Ford, and taken over by the Indian group Tata Motors in a £1bn deal that will be announced today, industry sources said last night.

Though widely expected, the move ends months of speculation about the British marques since Ford and Tata – which recently launched the "people's car", the £1,200 Nana – entered into talks last year.

Trades unions are expected to welcome today's deal as the best option available. The Tata empire, which includes Tetley Tea and the Anglo-Dutch steelmaker Corus, has committed itself – for now at least – to preserving the 16,000 jobs involved.

Jaguar, makers of the X-type, the XJ and the XF series, has plants at Castle Bromwich in the Midlands and at Halewood on Merseyside, while Land Rover – which makes the Range Rover, Freelander and Defender – is based at Solihull in the west Midlands. Despite the relative calm expected among unions, it has been reported that Tata's commitment to keeping the three Jaguar-Land Rover factories open will last until 2011 only. After that, the production could move out of the UK.

With Mini and Rolls-Royce, and Bentley, owned by the German companies BMW and Volkswagen respectively, the deal means that some of the most famous names in British motoring remain in foreign hands.

Ford, which makes a loss, is selling the marques after investing billions of pounds into them since taking them over almost 20 years ago.

Tata takes over at a time when Land Rover is making a profit but Jaguar is suffering losses. The Indian group's boss, Rata Tata, tried to reassure the UK brands at this year's Geneva Motor Show that he planned to retain their "image, touch and feel". He said: "There is no need to tinker with the brands. Our challenge is to make them thrive and grow."

Land Rover, which was launched in 1948, towers over the four-wheel drive market and has been owned by the American corporation since 2000.

Jaguar, which began as a single model but was made a whole-company name in 1945, was taken on by Ford in 1989. Its well-known models include the E-type and the S-type.

Other groups believed to have been in the running for the sale – which was announced in June – include JP Morgan's private equity arm, One Equity Partners, and a consortium of Apollo Management and the Indian car firm Mahindra & Mahindra.

Ford remained tight-lipped last night. A spokesman would only say: "We are not confirming anything until we have communicated any significant developments to our employees."

Tata, which won headlines around the world in January when it launched the Nana, the world's cheapest car, accounts for more than half of India's truck market and around 20 per cent of its car market. A quarter of Tata's £24bn revenue comes from the UK, where it employs 30,000.

The Independent on Sunday reported this week that the deal would take place today.

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