A day after Tata Motors clinched Ford Motor Company?s Jaguar Land Rover (JLR) for $2.3 billion, managing director Ravi Kant said the timing was just right for the deal and that the risks in one geography would be mitigated by the advantages drawn from others.
Speaking at a press conference at the Bangkok International Motor Show on Thursday, Kant said: ?We are not buying separate brands. We are buying a company, which has two brands: Jaguar and Land Rover. On a consolidated basis, it is a profitable venture.?
?Opportunities will not always come. It is known that the automobile industry is a cyclical one. There are good times and bad times. We believe it is the right time to go for such a deal and it is an exciting one for Tata Motors. It is possible to offset some negatives of one geography with the positives of other geographies,? Kant explained.
Commenting on the challenges of managing the newly acquired brands, he said: ?Every brand has its own strengths and challenges.? Though JLR will be a wholly owned subsidiary of Tata Motors, it will remain a separate company and have its own strategy and focus. ?We have plans to mitigate the risks and will give a fresh thrust to products and new strategies,? he said.
In response to a query on the cost of acquisition, he said: ?Of the $2.3 billion, nearly $600 million will be brought back by Ford as pension compensation, which means the money is coming to the company in a different form.?
JLRs brands are strong in the UK and the US and also in the rest of Europe. The company will focus on marketing in Russia, the Middle East and other prospective countries. ?We will strengthen the product portfolio of the company with new launches,? he said, adding, ?It is up to the JLR management to decide whether to introduce its models in India or not.?
On bankrolling the deal, he said the company had already announced plans to raise funds. Whether there would be a dilution of equity to replace the proposed bridge loan would be decided in the next few weeks. He refused to disclose details of whether Tata Motors would raise funds on its own or float a special purpose vehicle for the purpose.
?(Travel for the story was sponsored by Tata Motors)
