Brief lntegrative Case 2
The Last Rajah: Ratan Tata and Tata's
Among Asia's business titans, Ratan N. Tata stands out for his modesty. The chairman of the Tata Group-India's biggest conglomerate, with businesses ranging fiom software, cars, and steel to phone service, tea bags, and wristwatchesusually drives himself to the offìce in his $12,500 Tata Indigo Marina wagon. He prefers to spend weekends in solitude with his two dogs at a beachfront home he designed himself. And disdainful of pretense, he travels alone even on long business trips, eschewing the retinues of aides who typically coddle corporate chieftains. But the 69-year-old Tata also has a daredevil streak. An avid aviator, he often flies his own Falcon 2000 business jet around India. And in February he caused a sensation at the Aero India 2007 air show by co-piloting Lockheed F-16 and Boeing F-18 fighter jetS. Tata's business dealings reflect the bolder side of his personality. In the past four years he has embarked on an investment binge that is building his group from a oncestodgy regional player into a global heavyweight. Since 2003,Tata has bought the truck unit of South Korea's Daewoo Motors, a stake in one of Indonesia's biggest coal mines, and steel mills in Singapore, Thailand, and Vietnam. It has taken over a slew of tony hotels, including New York's Pierre, the Ritz-Carlton in Boston, and San Francisco's Camden Place. The 2004 purchase of Tyco Intemational's undersea telecom cables for $130 million, a price that in hindsight looks like a steal, turned Tata into the world's
the group plans $28 billion in capital investments at home over the next f,rve years in steel, autos, telecom, power, chemicals, and more. "'We rescaled our thinking in telms of glowth," Tata says over tea at Bombay House, the
group's headquartels since 7926, a tranquil oasis with
well-worn marble floors, a vast collection of modern
Indian art, and staffers who circulate with bowls of vanilla ice cream every day at 3 p.m. "We just forced and cajoled our businesses to make this happen."
The forcing and cajoling have worked brilliantly. The market value of the 18 listed Tata companies has swelled to $62 billion, from $12 billion, since 2003. Group sales and profits have doubled, to $29 billion and $2.8 billion, respectively. The three big companies that account for 75 percent of sales-Tata Steel, Tata Motors, and Tata Consultancy Services-are enjoying some of their best years ever. And in May, Tata Tea netted $523 million in prof,rt when Coca-Cola Co. (KO) paid $1.2 billion fol its 30 percent stake in Energy Brands Inc., the maker of Glacéau Vitamin'Water. Not bad for a purchase made just nine months earlier. "This is a transformed Tata," says Rajeev Gupta, managing director of private equity shop Carlyle Advisory Partners. The global push began four years ago. After a rocþ
biggest carrier of international phone calls. With its $91 million buyout of British engineering frm Incat International, Tiata Technologies now is a major supplier of outsourced industrial design for American auto and aerospace companies, with 3,300 engineers in India, the United States, and Europe.
decade as chairman, Tata commissioned a sweeping
The crowning deal to date has been Tata
review to plot strategy, including a study comparing India with China. He was struck by the sheer audacity of Chinese projects. "Whether they built a port or ahighway, they did it big, the kind of scale that caused skepttcs is over the top,"' he saYs. "Bu[ o it." lndia, he concluded, should should Tata Group. By levercgin9 into rurb
$13 billion takeover in April of Dutch-British steel giant Corus Group, a target that would have been unthinkable just a few years ago. In one swoop, the move greatly expands Tata Steel's range of finished products, secures access to automakers across the United States and Europe,
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and boosts its...
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