(Agencies)
Updated: 2008-03-26 21:09

DETROIT -- Ford Motor Co. is selling its Jaguar and Land Rover businesses to India's Tata Motors Ltd. in a $2.3 billion deal less than half the price that the struggling Ford paid for the two luxury brands.

The deal announced Wednesday will expand the Indian carmaker's reach around the globe.

The agreement had been in the works for months as cash-strapped Ford sought money to fund its turnaround plan.

Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. But it has been struggling and wants to focus on its main brands.

Tata said it expects no significant changes in the terms of employment for Jaguar and Land Rover's roughly 16,000 workers. It said Ford will pay about $600 million into the Jaguar-Land Rover pension fund at the closing, which is expected at the end of the second quarter.

"Jaguar and Land Rover are terrific brands," Ford CEO Alan Mulally said in a statement. "We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship.