By IANS
London : India's automobile major Tata Motors is in the initial stages of assessing a bid for American automaker Ford's British luxury brands Jaguar and Land Rover, it was reported by the media here Wednesday.
According to The Daily Telegraph, Tata Motors Chairman Ratan Tata is understood to have instructed advisers to begin evaluating the merits of a joint offer for Jaguar and Land Rover, which analysts suggest may fetch about $1.5 billion.
When contacted, Tata Motors, however, declined to comment on the issue.
It is being speculated that in a bid to offset declining sales and cut costs, Ford is planning to sell Jaguar and Land Rover to a single purchaser.
There is a likelihood that the buyers would be more interested in the Land Rover brand, which Ford has invested in heavily in recent years.
The newspaper also reported that, people close to the situation said that Tata Motors' evaluation of a bid was at an "exploratory" stage and may not lead to a formal bid for the two brands.
The report said, citing an unnamed source familiar with the situation, that Tata Motors had signed a confidentiality agreement with Ford in recent days.
Besides Tata, other carmakers may be interested in bidding, while a formal auction would also be likely to attract private equity firms.
The Tata Group is also responsible for India's biggest foreign takeover, having acquired the British steel company Corus through its Tata Steel earlier this year.
The group's automotive unit has been drawing up plans to launch the world's cheapest car, a $2,500 vehicle that could be launched as early as next January.
Ford bought Jaguar in 1989 for $2.5 billion, Volvo's car operations in 1999 for $6.45 billion and Land Rover in 2000 from BMW for $2.73 billion. It once hoped the luxury division could earn upward of $1 billion a year.
Ford spokesman John Gardiner was reported as saying that the company was "actively" studying options that could include the sale of its legendary British nameplates Jaguar and Land Rover as part of a company-wide strategic review.
Mark Fields, Ford's president of the Americas, had earlier said this was part of the plan to "help us achieve our commitment to reduce overall operating costs by $5 billion by the end of 2008.