India's Tata Motors agreed Wednesday to buy Jaguar and Land Rover from Ford Motor Co.

The price was set at $2.3 billion US, but Ford has agreed to put as much as $600 million into the pension plan of Jaguar Land Rover, the company that owns the brands, plants and intellectual property rights.

A Range Rover sits outside the Land Rover factory in Birmingham, England, which has been taken over by Tata Motors of India.
(Simon Dawson/Associated Press)

The deal had been expected as Ford said in January that Tata was the preferred bidder for the British automakers. Ford paid more than twice the selling price for the two brands, buying Jaguar in 1989 for $2.5 billion and Land Rover in 2000 for $2.7 billion.

The companies said they "do not anticipate any significant changes" to the 16,000 employees' jobs.

The deal is expected to close by June 30, Tata said.

"We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business," Tata chairman Ratan Tata said in a release.

"We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact."

Alan Mulally, president and CEO of Ford, said Jaguar and Land Rover "are terrific brands," but Ford is concentrating on its own nameplates. It has been losing market share in the U.S. and struggling with financial issues.

Ford reported a loss of $2.67 billion in 2007, down from $12.61 billion in 2006.

It expects to post another loss for 2008, but predicts it will be smaller than in 2007.

Ford will continue to supply Jaguar Land Rover with some technologies, engineering and other services and parts for undisclosed periods.

Its credit arm, Ford Motor Credit Co., will provide financing for Jaguar and Land Rover dealers and customers for up to a year, varying with individual markets.

Jaguar Land Rover's employees, unions and the British government were kept informed of the negotiations leading to the sale and support it, the release said.