Ford may keep minority stake in Jaguar, Rover

Ford Motor Co may retain a minority stake in the units of Jaguar and Land Rover to ensure security of engines and parts supplies even as the company has set September 30 deadline for final bids.

Ford, the world's third largest automaker, has recently put the two luxury brands, Jaguar and Land Rover, on the block.

Tata Motors, the automobile company of the Tata Group, has shown interest in acquiring Ford. The others said to be in the race include private-equity firms TPG, Cerberus Capital Management, Ripplewood Holdings and One Equity Partners. It is learnt that the bidders are in the various phases of due diligence.

Ford might also provide engineering support to the successful acquirer of these brands, said sources in the know of the development. "The bidders, particularly the private equity players, want Ford to keep stake in the range of 30-50 per cent in the two units so that the supply of parts is guaranteed. Ford's production links with Land Rover and Jaguar are sort of inseparable. So it makes sense for Ford to retain a stake, after the sale of these brands," said a source.

Bidders also want Ford to retain a stake so that the units could comply with the stringent emission norms in Europe. Land Rovers and Jaguars emit 130 gm per km more than the current proposed limit.

Ford had retained a 15 per cent stake in Aston Martin when it was sold several months ago. Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.73 billion in 2000.

Meanwhile, trade unions have urged the government to block any sale to a private equity bidder as they foresee that any such sale would lead to job losses.

They are preparing for another meeting with Ford this week wanting the company to ensure a long-term commitment.