Case Study on Tata Motors and Ford Motors Mergers and Aquisition
Abstract:
In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition of the two iconic British brands - Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion. Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the world 's cheapest car - the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Though there was initial skepticism over an Indian company owning the luxury brands, ownership was not considered a major issue at all.
According to industry analysts, some of the issues that could trouble Tata Motors were economic slowdown in European and American markets, funding risks, currency risks etc.
Issues:
» Understand the role of acquisition as a growth strategy.
» Examine Tata Motors ' inorganic growth strategy.
» Examine the rationale behind Tata Motors ' acquisition of Jaguar and Land Rover.
» Understand the advantages and disadvantages of cross-border acquisitions.
» Understand the need for growth through acquisitions in foreign countries.
Acquisition of JLR provides the company with a strategic opportunity to acquire iconic brands with a great heritage and global presence, and increase the company 's business diversity across markets and product segments."1
- Tata Motors, in April 2008.
"If they run the brands as a British company and invest properly in new product, it will be successful because they are still attractive brands."2
- Charles Hughes3, Founder, Brand Rules LLC4, in 2008.
"Market conditions are now extremely tough, especially in the key US market, and the Tatas will need to invest in a lot of brand building to make and keep JLR profitable."5
- Ian Gomes, Global Head, Emerging Markets, KPMG, in 2008.
Acquisition of British Icons
On June 02, 2008, India-based
In June 2008, India-based Tata Motors Ltd. announced that it had completed the acquisition of the two iconic British brands - Jaguar and Land Rover (JLR) from the US-based Ford Motors for US$ 2.3 billion. Tata Motors stood to gain on several fronts from the deal. One, the acquisition would help the company acquire a global footprint and enter the high-end premier segment of the global automobile market. After the acquisition, Tata Motors would own the world 's cheapest car - the US$ 2,500 Nano, and luxury marquees like the Jaguar and Land Rover. Though there was initial skepticism over an Indian company owning the luxury brands, ownership was not considered a major issue at all.
According to industry analysts, some of the issues that could trouble Tata Motors were economic slowdown in European and American markets, funding risks, currency risks etc.
Issues:
» Understand the role of acquisition as a growth strategy.
» Examine Tata Motors ' inorganic growth strategy.
» Examine the rationale behind Tata Motors ' acquisition of Jaguar and Land Rover.
» Understand the advantages and disadvantages of cross-border acquisitions.
» Understand the need for growth through acquisitions in foreign countries.
Acquisition of JLR provides the company with a strategic opportunity to acquire iconic brands with a great heritage and global presence, and increase the company 's business diversity across markets and product segments."1
- Tata Motors, in April 2008.
"If they run the brands as a British company and invest properly in new product, it will be successful because they are still attractive brands."2
- Charles Hughes3, Founder, Brand Rules LLC4, in 2008.
"Market conditions are now extremely tough, especially in the key US market, and the Tatas will need to invest in a lot of brand building to make and keep JLR profitable."5
- Ian Gomes, Global Head, Emerging Markets, KPMG, in 2008.
Acquisition of British Icons
On June 02, 2008, India-based