Ford's decision to sell its iconic brands Jaguar and Land Rover to Indian conglomerate Tata has failed to enthuse the stocks of the US car maker
NEW YORK: Ford's decision to sell its iconic brands Jaguar and Land Rover to Indian conglomerate Tata has failed to enthuse the stocks of the US car maker, which slipped over two per cent on the New York Stock Exchange after the announcement.
After months of discussions, Tata Motors entered into a definitive agreement with Ford on Wednesday to acquire the two British luxury brands at an estimated 2.3 billion dollars.
Following the announcement, shares of the American car maker declined 2.17 per cent to end at 5.87 dollars on the New York Stock Exchange.
The scrip had opened positively at 6.09 dollars, up 1.5 per cent compared to Tuesdays closing price of six dollars.
However, during the day's trade, shares of the firm fell to an intra-day low of 5.83 dollars.
Going by the closing price of 5.87 dollars, the company had a market capitalisation of 12.96 billion dollars.
Further, the transaction is the culmination of Ford's decision last August to explore strategic options for the JLR business as the company increases focus on its Ford brand and "One Ford" global transformation.
Commenting on the deal, Ford Motor CEO and President Alan Mulally had said: "Jaguar and Land Rover are terrific brands... we are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship.
"Now it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Co that delivers profitable growth for all," he added.
During the three trading sessions this week starting March 24, Ford's scrip ended in the positive territory only on Monday. On that day, Ford had gained about six per cent to end at 5.96 dollars.
In the last three months since December, shares of Ford have declined nearly 15 per cent.
Meanwhile, the shares of Tata Motors also did not fare well on the Indian bourses, ending down 0.08 per cent at Rs 679.4 on Wednesday. The scrip today was trading at Rs 648.20, down 4.59 per cent in the afternoon trade at the Bombay Stock Exchange.
"We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business," Group Chairman Ratan Tata had said after making the deal public.
"We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact," he said.
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