Fiat pulls out; Ford examines 'strategic options' for Jag and LR
11 June 2007

Last month it was Volvo; this month, it's sister PAG brands Jaguar and Land Rover that could be up for sale, as reports circulate that Ford is actively seeking buyers for its Brit-based premium car-makers.According to industry reports, until only the end of May, Italian car-maker Fiat was engaged in serious talks with Ford about the purchase of Land Rover and Jaguar. The negotiations were ended by Fiat, they suggest, over concerns that the acquisition would damage Fiat's credit rating.There remains no sign that Volvo, the third member of PAG, is up for sale, but Ford does seem intent on finding a new owner for the Jaguar and Land Rover brands. Why both? Because Jaguar and Land Rover are intimately intertwined, joined at the hip on shared engines, factories, and they're only likely to become closer related in the future.With Land Rover standing as a profitable business, and Jaguar's reputation as a millstone around Ford's neck, industry experts have suggested that the brands will be sold in a "buy one, get one free" deal. However, finding a buyer willing to take on brands like LR and Jag in the current emissions-sensitive environment won't be easy.

Other interested parties

So if Fiat isn't interested, who is? The Renault-Nissan alliance brands were linked to the sale over the weekend, but yesterday fervently denied any interest and, although companies such as Peugeot-Citroen and Hyundai have been mooted as potential owners of the brands, they haven't expressed an interest recently, as far as Autocar is aware. What makes a sale to another established car-maker unlikely is that it would take a very specific marque to make a success of the takeover. It would have to be a maker with billions to invest in turning Jaguar's losses around, and yet also with a use for both Jaguar as a premium brand, and Land Rover as a specific 4x4 maker. There are few car makers that fit the bill.Ford is more likely to find a buyer in the cash-rich private equity arena. It was from there that the winning bidder for Aston Martin emerged earlier this year, and that Daimler found a buyer for its troubled Chrysler arm in April.Private equity group Alchemy, which was linked with a potential MG Rover buyout two years ago, was immediately linked with the sale. Yesterday, though, an Alchemy spokesman moved to distance the group from proceedings, suggesting that Alchemy boss Jon Moulton's interest in Jaguar and Land Rover was only "an emotional one".

Henry's guarded response

Ford's responses to questions about the fate of Jaguar and Land Rover have been several, and fairly uniform in their tone. It insists that anyone who suggests that the sale of the brands is definite is "purely speculating," but did say that "the Ford Motor Company is continuing to assess a number of strategic options for all of its operations."Investment banks Goldman Sachs, Morgan Stanley and HSBC have, according to Autocar's sources, been appointed to administrate the sell-off, and neither Ford, nor any of the banks mentioned, have denied their involvement.Autocar also spoke to a Ford insider who told us: "it's very early days. We are still investigating our ongoing strategic options; no timescale has been set for a decision.""We are working with financial advisors though, and we had a meeting with the goverment yesterday, where the situation with Jaguar and Land Rover was discussed.""You can see where all this is heading," he went on, "but it'll take time. We're not expecting to make any big annoucements imminently."

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