Tata Motors of India is leader to buy Jaguar and Land Rover By Heather Timmons Thursday, January 3, 2008 c/o IHT

Tata Motors of India is leader to buy Jaguar and Land Rover
By Heather Timmons

Thursday, January 3, 2008
LONDON: When Ratan Tata visited the home of the designer Ralph Lauren last autumn, the two auto enthusiasts spent much of their time in the garage, admiring Lauren's extensive car collection, including the Batmobile-esque, 1955 Jaguar XKD.

Now Tata, 70, is poised to take over Jaguar itself.

Tata Motors said Thursday that it was entering detailed talks with Ford Motor about the acquisition of Jaguar and Land Rover, confirming what investors and analysts in India, Detroit and Britain have anticipated for months. Tata Motors said that it aimed to reach an agreement in upcoming weeks.

"There is still much work that needs to be done," the company said in its statement. "We are pleased by the progress in the discussions to date."

No figures were given, but reports have said that Ford, which wanted to focus on turning around its money-losing U.S. operations, could get as much as £1 billion, or $1.97 billion, from a sale.

For Ratan Tata, the takeover will cap 16 years transforming Tata Group, one of the world's most diverse and unusual conglomerates. Through 98 companies, Tata creates and sells everything from steel to tea to watches, making the name ubiquitous in India. Under Tata, it is a name that has started to reverberate around the globe as well. A string of international deals in recent years has diversified Tata to the point where more than half its revenues this year will come from outside India. Tata's increasingly global outlook is piquing the overseas ambitions of other Indian firms as well.

Going overseas was a necessity, Tata explained during a recent interview. In the late 1990s, the group's truck unit recorded a loss that was the "biggest in Indian history," he said at the Tata headquarters in the leafy Colaba district of Mumbai. "We were so dependant on one economy," that of India, he said. "I decided we needed a broader view."

Since then, Tata has made dozens of deals, buying businesses as diverse as Tyco Global Network, Daewoo Commercial Vehicles, the Moroccan chemical company Imacid, Tetley Teas and most audaciously, the British steel maker Corus in a £6.2 billion takeover last year of a company several times the size of Tata Steel.

The group's 27 listed companies have a market capitalization of more than $70 billion, and the entire group reported after-tax profits of $2.8 billion in the last fiscal year - a 33 percent jump from the year before, increased by the Corus acquisition.

The latter deal earned Tata some rare criticism, with analysts wondering if he had finally taken on too much. Corus "came to us, we didn't seek them out," Tata is quick to say, and it was a deal he could not pass up. In "one swoop we were in Europe, where we weren't before," he said. "That opportunity was going to happen once, and it was not going to happen again."

Tata seems the most unlikely of corporate titans - almost preternaturally humble, unabashedly open about the company's mistakes, and also about the fact that he never really wanted to be an industrialist in the first place.

He studied architecture at Cornell University in New York. Now, after decades working for the family business, he says he is even considering opening a small architecture firm when he retires. Never married, he lavishes attention on his dogs, writes thank you notes to employees who do him favors, and is often spied driving alone on Marine Drive in Mumbai on a Sunday in one of the several cars he owns.

The Tata Group is an unusual corporate enterprise, though. Started in 1868 by Jamsetji Tata, the company has prided itself on fair business practices rather than cutthroat maneuvering or paying bribes, a practice still prevalent in some of corporate India. The group has often seemed to value employees as much as profit, agreeing to pay laid-off Tata Steel employees for the rest of their lives, for example. Ratan Tata is a distant relative of the founder - his father was adopted by the wife of one of Jamsetji's sons - and his reserved demeanor made him an unlikely corporate chief.

"None of us observers of the Tatas could have predicted that he would grow and blossom the way he has and be in total charge of the company the way he has," said R.M. Lala, the author of several books about the Tata family and companies, and a former director of the Tata Trust, a charity that funds health care and education projects in India. Other executives and companies may have made more money in India, Lala said, "but Tata is still the most respected name in Indian industry."

As chairman of Tata, he has been instrumental in carrying on the family legacy, and turning what was a loosely aligned group of companies that shared one name into a seven-business-line group with centralized management.

It is a business plan that Tata developed in the most unlikely of settings: He spent three months at his mother's bedside at Memorial Sloan-Kettering Cancer Center in New York in 1981. At the time he was chairman of Tata Industries, then a small part of the group responsible for new ventures.

When he was named chairman of the entire group in 1991, he started acting on the plan he had formed, reining in some of the company's independently minded managers, scaling back the number of companies and giving the parent company sizable equity stakes in its offspring.

The process was not easy, Tata wrote with typical candor in a 2003 epilogue to "The Creation of Wealth," one of Lala's books about the Tatas. "If I reflect on what these 10 years have been for me personally - they have been a mixed bag," he said.

Outsiders do not see it that way, though. The Tata family has been "all about building businesses and being far-sighted about it," said Tarun Jotwani, the chief executive of Lehman Brothers in India. What Tata has done very well is be the strategic and ethical head, while providing a "culture of integrity," Jotwani said.

Tata's tenure as the head of the group might end soon: He says he is considering retiring after one of his pet projects, the $2,500 "People's Car" enters showrooms this year.

Tata has no heirs, and there is no likely family member to take over his role, meaning that the Tata who brought the Tata Group to the rest of the world may be the last Tata to run the company.