Ford Motor Co. has finalized a deal to sell British luxury brands Jaguar and Land Rover to India's Tata Motors Ltd. for two billion dollars.
According to the Wall Street Journal, the sale price "is much less than what Ford originally paid for either business... Ford acquired Jaguar for $2.5 billion in 1989 and Land Rover for $2.75 billion in 2000." The sale also includes "a pledge by Ford to contribute to the two brands' pension fund, and by Tata to continue buying engines from Ford," reports the Financial Times. The Wall Street Journal says Ford should earn between $70 million and $100 million in profit from those sales.
The agreement, which will be officially announced on Wednesday, is part of Ford's plan to re-focus on its North American Market. According Bloomberg, Ford suffered "$15.3 billion in losses the past two years." A weak economy, an increase in the price of raw materials, and stricter Corporate Average Fuel Economy (CAFÉ) standards have all contributed to a recent recession within the auto industry.
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