Ford's Luxury Brands Now Valued at About $9 Billion

DETROIT, March 12, 2007; Reuters reported that Ford Motor Co could raise over $9 billion by selling its remaining luxury car brands, although such a move is unlikely in the short term, Merrill Lynch analyst John Murphy said on Monday.

Earlier on Monday, Ford announced it had clinched a deal to sell British sports car maker Aston Martin for $925 million to a coalition including a pair of Kuwait-based investment companies, racing entrepreneur David Richards and banker John Sinders.

Ford repeated on Monday 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.

After selling Aston Martin, Ford retains Jaguar, Volvo and Land Rover. Ford does not disclose results for its individual brands, but taken together its luxury line-up -- known as the Premier Automotive Group -- lost $327 million in 2006.

"The high multiple awarded to Aston indicates that other PAG brands may be valuable sources of liquidity for Ford, although the company's repeated commentary indicates they are not for sale," Merrill's Murphy said in a note for clients.

"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," he said.

Murphy estimated that the combined sale of Jaguar and Land Rover would raise between $1.3 billion to $1.5 billion, while a sale of Volvo would raise about $8 billion.

Murphy said a sale of Jaguar would be "most likely" of the alternatives given the recent difficulties for the luxury brand, but said it would have to be bundled with Land Rover in order to make it more attractive to potential bidders.