Case Study Of Acquisition Of Jaguar And Motor Motors

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Acquisition of Jaguar and Land Rover brands by Tata Motors Ltd. from Ford Motors
In 2008, Tata Motors Limited and Ford Motors reached an agreement which was about Tata Motors acquiring Land Rover and Jaguar brands. The transaction is worth US$ 2.3 billion, and it was concluded in 2008 (Wharton University of Pennsylvania 2007). The deal was criticized by many while others reserved their comment and maintained a keen eye to see how Tata would make a turn around to make the two brands regain their market and profitability under new management. The fact that Tata Motors is a company from India which is an emerging market was the main reason why many people were skeptical. Ford Motors were struggling to make their business thrive in a competitive
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Tata Motors has to be ready for the risks that come with such acquisition done at a period when there are recession uncertainties. Although many people may be tempted to think that Tata will perform well after acquisition because India has low production costs, the company needs effective strategies which will guarantee them success (Wharton University of Pennsylvania 2007). One important decision I to maintain manufacturing sites in the United Kingdom because immediate transfer may be affected by the political sensitivities that exist among leaders in the region concerning the impact of motor industry (Wharton University of Pennsylvania…show more content…
The company was facing a challenge in all its product lines mostly due to r3ession in the United States. The economic uncertainties led to a decline in sales, and Ford Motors was making huge loses. In 2006 and 2007, Ford motors made a loss of fifteen billion United State Dollars. Ford tried to turn around its operations, but its efforts were not successful. On the other hand, Tata was becoming stronger and was looking for an international brand which would make it easy for it to get into the international market since they had received excellent growth in India. When Ford Motors put Jaguar and Land Rover out for sale, Tata Motors saw an opportunity which would help it realize its growth ambition since the two luxury passenger vehicles were well established in premium passenger vehicles market. It was easier to manage such a brand than manage a new brand coming from India, hence Tata pursued the
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