DETROIT Ford Motor Co. officially unloaded its storied Jaguar and Land Rover businesses on Monday netting the cash-strapped automaker a $1.7 billion boost that's a mere third of what it paid for the two luxury brands.
India's Tata Motors Ltd. said it had completed the purchase of the brands in a deal first announced March 26.
Tata is paying about $2.3 billion for the British brands, but Ford is paying about $600 million into the Jaguar-Land Rover pension fund.
Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000.
"This is a momentous time for all of us at Tata Motors," Tata Chairman Ratan N. Tata said in a statement. "Jaguar and Land Rover are two iconic British brands with worldwide growth prospects. We are looking forward to extending our full support to the Jaguar Land Rover team to realize their competitive potential."
Tata confirmed David Smith, acting chief executive officer of the brands, will take the top job. The former chief financial officer took on the interim role after last month's death of former CEO Geoff Polites. The 60-year-old Polites died after battling serious illness for the past two years.
Polites, who had been CEO since 2005, was credited with steering the brands through the sale process.
Ford said in a statement the sale culminates its decision last August to explore strategic options for the businesses as the Dearborn automaker sought to focus on its core brands and global turnaround plan.
As part of the overall deal, Ford said it will continue to supply Jaguar and Land Rover with engines, stampings and technology.
Ford had hoped to turn Jaguar, founded in 1922, into a high-volume brand that could compete with BMW and Mercedes-Benz. But its entry-level X-Type sedan, introduced in 2001 to lure younger buyers, sold poorly and was slammed for its conservative styling. Jaguar's U.S. sales were down 24 percent last year.
Land Rover, which was founded in 1948 the year after India gained its independence from Britain has fared better thanks to popular products such as the Range Rover Sport and LR2. Land Rover's U.S. sales were up 4 percent last year. But unlike Jaguar, which has improved its quality rankings under Ford, Land Rover placed last in J.D. Power and Associates' rankings of initial quality and dependability in 2007. The rankings measure problems per vehicle after 90 days and again after three years of ownership.
Tata Motors is part of Tata Group, India's oldest and largest conglomerate. The family business is owned mostly by Tata-funded charitable trusts. A substantial portion of the group's income is channeled into various philanthropies that have helped build some of the country's finest institutions, including India's first cancer hospital.
Tata companies are known for offering worker benefits that are rare in India, including pension and child care allowances.
Ford shares were up 4 cents at $6.84 in morning trading Monday.