Case Study on Tata Motors and Ford Motors Mergers and Aquisition
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.
» 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