Is Tata Motors close to buying out Jaguar, Land Rover?

According to sources, Tata Motors may have inched closer to bagging the deal for Land Rover and Jaguar, which are part of Ford''s loss making Premier Automotive Group, reports CNBC-TV18. Sources said that M&M is likely to bid for Jaguar and Land Rover along with PE player Apollo.

The two Ford brands, Land Rover and Jaguar, are on the block and have attracted half a dozen suitors ranging from private equity firms such as Cerebrus and Blackstone to Indian auto companies like Tata Motors and Mahindra & Mahindra.

Earlier reports had suggested a likely deal size of about $1.5 billion. Tata Motors has refused to comment on the deal. Ford, too, has denied any development regarding about its proposed divestment of Jaguar and Land Rover. It has said that it is still evaluating expressions of interests.

All that the American auto major said was, "We are pleased with the positive expressions of interest we have received and in the strength and quality of the interested parties. We are exploring, in greater detail, the potential sale of the combined Jaguar-Land Rover business with selected parties, who have expressed interest. No final decisions have been made at this time."

The move from Tata Motors, analysts estimate, is aimed at asserting Tata Motors'' presence in Europe. In all likelihood, these two brands have been picked up together because Ford was very clear according to analysts - Land Rover is faring much better than Jaguar which is struggling and is a loss making unit. It will be difficult for Ford to sell Jaguar independently at a price at which it expects.

Of course, it will find a buyer but may not find the price it expects because Jaguar is a loss making unit and its volumes are falling; it is struggling to maintain its foothold in the market. So both clubbed together, is what the winning bidder would get.