Ford sale of Jaguar to Tata Motors is expected , Monday, December 17, २००७, क/ओ IHT

Ford sale of Jaguar to Tata Motors is expected
By Heather Timmons
Monday, December 17, 2007
NEW DELHI: The luxury brand Jaguar is poised to join an Indian auto company that makes everything from tractor-trailers to the world's least expensive car.
Tata Motors is the front-runner in the race to buy Ford Motor's Jaguar, as well as Land Rover, and a decision about a winning bidder could be made over the next few days, people close to the negotiations said. A final signed deal, expected to be worth about $2 billion, will not be announced until early next year, they said.
About the same time that a final deal may be announced, Tata Motors plans to roll out its "People's Car," with a price tag of about $2,500.
The combination of high-end, specialized products and less expensive ones may seem like an unlikely business model, but Tata Group, the sprawling family-run conglomerate that owns Tata Motors, is full of similar contradictions.
The company's Taj Hotels command some of the highest rates in the world - one night in a luxury suite in the Taj Mahal Palace in Mumbai can cost 110,000 rupees, or $2,795. But the Tata Group is also building a chain of no-frills hotels around India, with rates as low as 1,499 rupees a night for a double room in some cities.
Tata owns a chain of high-end jewelry stores, Tanishq, that sells gold and diamonds, and it makes fertilizer through its Tata Chemicals unit. The company has an exclusive charter airplane business, which promises confidentiality for chief executives and Bollywood stars, and it also owns Tata Sky, which beams business news and hit movies into one million Indian households.
Analysts and economists in India say that while the parent company may look like a ball of contradictions from the outside, it is held together by some common management mandates.
Tata Motors has been the front-runner in a three-way race to buy out Jaguar and Land Rover since trade unions backed Tata's bid in November. The Indian auto company Mahindra & Mahindra is also vying for Jaguar and Land Rover, as is a private equity group, One Equity Partners.
As in many family-run conglomerates, there is a "strong emphasis on the long-term perspective," said Subir Gokarn, the chief economist in Asia for Standard & Poor's. Tata focuses on social responsibility and ethics, and on fair dealing with the government, he said.
After-tax profit at Tata Motors, which is publicly traded, increased 21 percent in the first half of this fiscal year to 9.94 billion rupees. Not all of the profit goes to shareholders, though - some goes to charity.
Tata Group owns one-third of Tata Motors, and Tata Sons, the holding company that manages Tata Group, is itself two-thirds owned by charitable trusts.
While Tata is not commenting on the deal, Ratan Tata, the head of the conglomerate, has talked recently about how he feels acquisitions should be handled in general.
"Our mandate is, we don't want to change the look and feel of a company," Tata said during an interview in his Mumbai headquarters in October.
That means keeping the management intact, he said. When Tata is done buying a company, it should look the same as it did before, "except now it's owned by someone in India," he said.
Julia Werdigier contributed reporting from London.