On 26 March, Tata Motors signed a multi-billion-dollar deal with US car manufacturer Ford to buy British icons Jaguar and Land Rover. The deal is reportedly worth US$2.3 billion and Ford will pay US$600 million into the pension funds of Jaguar and Land Rover employees.
British law firm Herbert Smith advised Tata on the deal while US-based Hogan & Hartson represented Ford. A consortium of banks that provided Tata with a US$3 billion debt facility for the deal – including Citigroup, ING and Standard Chartered – was advised by Allen & Overy.
The new deal puts Tata in the unusual position of manufacturing some of the world’s most prestigious and expensive cars alongside its cheapest. This has led some commentators to question the wisdom of the acquisition. Speaking to The Economist, Balaji Jayaraman of Morgan Stanley suggested that the deal would be “value-destructive given the lack of synergies and the high-cost operations involved”.
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