Ford has appointed Goldman Sachs, Morgan Stanley and HSBC to investigate selling its British premium brands Jaguar and Land Rover. The move effectively signals the end of the Blue Oval’s PAG division.
Officials have refused to confirm or deny the sale, but have outlined to MPs the deal which will spin off Jaguar and Land Rover, but retain Volvo in the Ford family. Ford sold Aston Martin, PAG’s sports car brand, to a private equity partnership earlier this year. No bidders for Jaguar/Land Rover are confirmed yet, but Fiat Auto denied it was in the frame, and Renault-Nissan has also distanced itself from reports it was interested. Alchemy Partners, the venture capitalists who nearly bought MG Rover back in 2000, is also a contender. Former Ford of Europe boss Martin Leach said he expected private equity companies as the most likely bidders, which raises fears over the 19,000 employees in the UK. ‘The two businesses have not been profitable for some time; the deal will most likely include some downsizing,’ he told the BBC’s Today programme.
Ford is desperate to make progress in its recovery programme after losing $12.7 billion last year. The Aston Martin sale raised £479 million and a combined Jag/Aston sale could swell Ford’s coffers further. Although Land Rover is in a healthier financial state than Jaguar, it is seen as almost impossible to separate the two brands, which is why Ford is considering bundling them together in a joint sale. The companies share many back-office functions, engineering units and even manufacturing at the joint Halewood plant in Merseyside. Although Ford doesn’t break down the results of its individual brands, the Premier Automotive Group suffered a bigger pre-tax loss last year, losing $327m compared with $89m in 2005. Selling off Jaguar, Land Rover and Aston Martin would effectively trigger the end of PAG.