Tata leads Jaguar, Land Rover purchase deal

London, Nov 26: Tata, the Indian conglomerate headed by Ratan Tata, has moved into pole position in the 1.5 billion pounds race to buy Jaguar and Land Rover, two of Britain's most prestigious car marques.

Quoting sources close to the negotiations, media on Sunday reported that positive meetings last week between Ravi Kant, managing director of Tata Motors, and trade union and government officials have given the Indian conglomerate an edge over its rivals.

It still faces stiff competition from One Equity, an American private-equity group, and Mahindra and Mahindra, the Indian car group that is bidding with Apollo, another American buyout firm.

Ford, the American automotive giant that is selling the two marques, could choose a preferred bidder within the next three weeks. The company is selling Jaguar and Land Rover as a single unit.

One Equity's bid is led by Jac Nasser, a former chief executive at Ford.

While Jaguar is loss-making - it is feared to lose about USD 500 million this year - Land Rover is having a purple patch.

The report quoted sources at the bidding teams to say they expect the business to make more than USD 1 billion this year, a remarkable result given the weakness of the US dollar. America is one of Jaguar and Land Rover's biggest markets.

The report said the likely 3 billion-dollar price tag would include a one-off payment into the companies' pension funds. They are in deficit, and negotiations with trustees over the level of the payment are continuing.

Tata Motors is part of the sprawling Tata commercial empire presided over by Ratan Tata, chairman of Tata Sons.

Kant and other bidders met unions and government officials last week. "Tata has been a hit with the unions and the government, but there may still be an issue over intellectual property transfer and, of course, price," a source said.