Tata India Case Study Strategy

Reasons:

TATA is an Indian company operating at that time, in one only automotive segment, low-end segment precisely, with high dependency of the home market and the utility vehicles. In fact, 90% of the revenues comes from India. This acquisition meant for TATA acquire a well-known brand like JLR, and with the latter also Lanchester’s brand, spreading its business risk across more and different geographic areas and segment without overlapping the existing TATA’s markets and products. JLR is a UK based company, with 26 branches all over the world, operating in the luxury/high-hand premier cars manufacturing. TATA wished to become a global player and a stronger competitor, rapidly, deciding to acquire directly a stressed company on sale by Ford.

However, TATA was able to reach an agreement with the worker’s unions and the company, winning the first “auction” against other companies offering a bid for JLR. A second problem was how to finance this acquisition. TATA collect the total amount needed obtaining a bridge loan about 3 billion by a consortium of banks and a subsequent three tranches issuing of rights and overseas flotation. (shares with different voting rights). In term of compliance, one of the trickiest part of an acquisition, the paper doesn’t say anything to suppose some problems in this phase of the deal. Nevertheless, we can expect a huge effort from both companies (more from the acquirer, of course) in this delicate phase of the acquisition process, and as consequences, a lot of complaints comes up as well as arguments, bargaining, reluctance to disclose strategic information from the acquired… The most difficult and uncertain parts of an acquisition is the implementation of the strategy and the integration. TATA Motors never experienced a production in a high end cars, in a new market such as Europe and US, with different regulation (changing in the new emission standards provide by EU), and a different culture (even if India was a UK’s

The scouting process is the basic assumption to keep in touch with the right company in a given moment, this process required time but is really important. The due-diligence is the M&A’s foundations: at this time TATA should conduct a deep analysis putting together the “acquisition team” and the “integration team” in order to figured out which could be the synergies, the issues, and the solutions and to insure themselves that there are all the prerequisite to go ahead with the deal an make more sure, but not at all, the success of the