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Pendragon suitor Lithia Motors in ‘advanced’ talks over £300m Jardine acquisition

Lithia Motors has revealed that it views Jardine Motors as “a platform for future growth in the UK” after it emerged the US-based car retailer was in advanced talks to acquire the AM100 group.

Lithia, which made a bid to acquire Pendragon last year, is understood to be lining up a takeover worth about £300 million, according to a report published by Sky News today (January 23).

The AM100’s ninth-placed car retail group, with a turnover of £1.61 billion, Jardine employs around 2,700 people at 50 sites across the UK and counts brands including Aston Martin, Audi, BMW, Ferrari, Jaguar Land Rover (JLR), Porsche and Pininfarina among its franchise partners.

In a statement issued to Sky News, $22.8bn (£19bn) turnover New York Stock Exchange-listed Lithia Motors said it had previously stated its “desire to expand into the UK market” and confirmed that it had held discussions with Jardine Motors Group owner, Hong Kong-based Jardine Matheson, with a view to investing in the car retail business.

It added: “Jardine Motors Group UK is one of the UK’s leading automotive retailers and Lithia firmly believes that a combination of the two businesses will help to deliver significant value for employees, partners and customers.

“Lithia views the potential acquisition of Jardine Motors as a platform for future growth in the UK and plans to invest in the business, working with Jardine Motors’ market-leading management team to build on the strong momentum the Group has generated in recent years.

“Discussions around a potential transaction are ongoing and a further update will be issued in due course.”

Lithia’s bid to acquire Pendragon was revealed by Sky News back in August.

It came in-between two approaches by Hedin Automotive for the former AM100-topping retail group, the latter of which was withdrawn after the Swedish car retail group entered the UK market through the acquisition of dealerships from Mercedes-Benz Retail Group.

If completed, Lithia’s acquisition of Jardine Motors Group would be larger than other recent large-scale M&A deals in the UK’s automotive retail sector – Marshall’s acquisition of Motorline and Vertu’s takeover of Helston Garages – in the shade.

A news insight report published by AM late last year found that the climate for car retail M&A was “hotting-up” in the UK, with overseas investors in pole position.

Alistair Cassels, head of automotive advisory at MHA, said: “Over the past five years we have seen a number of overseas entrants, including Motus, Super Group and Group 1, and we know there is still a lot of appetite from those overseas businesses to acquire more.

“As for other newcomers, like Hedin, some might have grown as much as they can in their home territory and be looking for a new opportunity. Others could be looking to make the most of what is – in some ways – quite a favourable climate for M&A activity.”

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