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Ford's Remaining Pag Brands Valued At About $9 Billion
The Ford Motor Co. could raise a remarkable $9 billion out of its remaining luxury brands. The luxury brands that make up the Premium Automotive Group include Jaguar, Land Rover and Volvo Cars. However, analysts Merrill Lynch and John Murphy said that the move of selling the luxury brands is pretty unlikely in the short term.
On Monday, Ford announced that it had settled a deal to sell its British sports car maker - Aston Martin - for $925 million to a coalition including racing entrepreneur David Richards, a pair of Kuwait-based investment companies, and banker John Sinders. The company also reiterated that it had no plans to sell its other luxury brands, although speculation has persisted that such a move could come if the automaker's restructuring runs into difficulties. Ford does not yet disclose the results for its luxury brands. However, taken together as part of the Premium Automotive Group, the latter has reported a $327 million loss last year.
"The high multiple awarded to Aston indicates that other PAG brands may be valuable sources of liquidity for Ford, although the company's repeated indicates they are not for sale," Merrill's Murphy said in a note for clients. He added, "However, given the potential need for liquidity in the next few years all options may be on the table in the future, especially if (Ford's restructuring) is not materially accelerated or falters.”
Murphy estimated that the combined sale of Jaguar and Land Rover would
be valued from $1.3 to $1.5 billion. Moreover, he added that a sale of Volvo would raise about $8 billion. Murphy said that a sale of Jaguar would be "most likely" of the alternatives given the recent difficulties for the luxury brand. However, he noted that it would have to be bundled with Land Rover in order to make it more attractive to potential bidders.
Jaguar Cars Limited is a British luxury car manufacturer which is headquartered in Browns Lane, Coventry, England. The brand’s main rivals are Audi, BMW, Cadillac, Infiniti, Lexus, and Mercedes-Benz. At present, the brand is introducing a new design philosophy to draw in more customers.
Land Rover is a British all-terrain and SUV manufacturer which is based in Solihull, England and this brand is a popular for its manufacture of high-performance off-road vehicles. Land Rover is so successful that it has outlived its initiator Rover.
Volvo Cars, on the other hand, is a Scandinavian luxury car maker, which was founded in 1927. The brand produces cars ranging from wagons, SUVs, sedans and coupes. It has achieved a reputation for comfort, durability, solidity and safety. The reputation was established because of its meticulous supervision in choice of sophisticated auto parts. As a fact, even the Volvo exhaust has passed a rigorous selection of materials and the finest process to boost the quality of the of the automaker’s product lines.
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