Lithia Motors buys UK dealership group Jardine Motors

Jardine Motors has more than 40 new-vehicle franchise points in the UK, with a portfolio of luxury brands including Aston Martin, Porsche and BMW, DeBoer said.

Part of the conglomerate Jardine Matheson Holdings, Jardine is Europe’s 23rd-largest dealership group by annual revenue, according to Automotive News Europe’s 2022 Guide to Europe’s Biggest Dealers.

The deal will add $2 billion to Lithia’s annual revenue, DeBoer said. In 2022, the company’s revenue surged 24% to $28.23 billion.

“And more importantly, it gives us a foundation to grow more in the United Kingdom, which is helping us drive towards our $50 billion target for 2025,” DeBoer said during the interview Wednesday evening with Automotive News.

DeBoer said the deal will bring about 2,700 employees to Lithia and that Jardine CEO Neil Williamson will stay on.

“We’re really looking for him to lead the organization forward and hopefully be able to continue to grow the business and provide United Kingdom customers with the special experience that Jardine has always provided,” DeBoer said.

DeBoer said Williamson brought expertise in the market and had been with Jardine for about a decade.

“He seemed to have the desire to want to grow, and I think the parent company was really looking to dive,” DeBoer said. “So they were in this quandary between growth or divestiture, and obviously, they chose divestiture.”

Lithia becomes the third publicly traded US auto retailer with stores in the UK, joining Penske Automotive Group and Group 1 Automotive. Shares in Lithia fell 4% to $211.51 in early trading Thursday.

Analysts said the slump shouldn’t be a surprise. Stephens Inc. on Thursday released a report about the acquisition, noting the news of the deal has already been baked into the market this week.

“We believe the UK luxury market is strong, but we expect a negative reaction today as this could fuel fears around fewer M&A deals in the US (we don’t believe this is the case),” the report said.

Said DeBoer: “This is more of a strategy to start to plant seeds for future growth. Our main goals for revenue growth are domestically, in the United States.

“We believe that this will be a good year for domestic growth as well at Lithia … and hopefully we’ll have further announcements later in the year.”