THE leading American private-equity group, Apollo, has joined the race for Jaguar and Land Rover by teaming up with Mahindra, the Indian carmaker.

The two British marques have been put up for sale by Ford. Bidders will this week make presentations to John Hutton, the secretary of state for business and enterprise, and to union leaders. Those still in the race are Tata, the India conglomerate, Mahindra/ Apollo, and two other US private-equity groups, One Equity and TPG.

Jaguar and Land Rover are being sold as a single unit. Together they employ 15,000 in the UK, with large plants at Castle Bromwich and Solihull in the Midlands and Halewood on Merseyside.

Insiders say Ford is likely to raise more than £1 billion from the sale, although bidders will have to assume a sizeable pension deficit.

Reports that the deficit had reached nearly £1 billion were described as exaggerated by insiders last week.

The winning bidder is likely to have to secure an agreement with the trustees of the pension funds on how the current deficit will be funded before being able to complete the deal.

City sources said the negotiations between Ford and the rival bidders centred on the use of intellectual property, Ford’s continuing involvement, and price.

“The intellectual property issue is important. Ford does not want the money it has invested in these companies being transferred outside to compete against it in other markets, but at the same time any bidder wants full use of what it is buying,” one source said.

The presentations to Hutton indicate how important the deal is for the future of the UK car industry. It is understood the meeting was arranged at the request of Ford.

“This shows that Ford is eager to be seen as a good corporate citizen. After the sale it will still have sizeable operations in the UK and wants to remain on good terms with the unions and government,” one car industry executive said.

Ford has major engine plants at Dagen-ham in Essex and Bridgend in Wales.

City sources say the race for the two marques is too close to call.

“It is a very interesting situation, because all of the bidders have some kind of insight into the inner workings of these companies, so they know what they are talking about,” said one source.

One Equity’s bid is being led by Jacques Nasser, the former Ford chief executive, while TPG has recruited Bob Dover, a former boss of Land Rover, as its adviser.

But some insiders believe the final tussle will be between the Indian bidders.

“I’m not sure who the new owner of Jaguar and Land Rover will be, but I’m pretty sure it will be an Indian company,” said one adviser involved in the talks.

Ford last week said it had for the moment decided against a sale of Volvo, another of its European brands. The car giant said it would retain the Swedish company while it returned to profitability.

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