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What are Mergers and acquisitions About TATA MOTORS About Ford Motor Company About Jaguar Land Rover Why is Ford Selling? The Reasons Behind Decision To Acquire THE DEAL PROCESS Analysis Valuation of deal Approach to acquisition Evaluation Fund Raising Problems faced Benefits SWOT Recommendations Business transformed over last five years
Mergers and acquisitions The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations . when two companies become one. selling and combining of different companies that can aid. of the target company's ownership stakes in order to assume control of the target firm. if not all. What Does Merger Mean? The combining of two or more companies. generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock Investopedia explains Merger Basically. This decision is usually mutual between both firms What Does Acquisition Mean? A corporate action in which a company buys most. finance. corporate finance and management dealing with the buying. or help a growing company in a given industry grow rapidly without having to create another business entity.
whereas hostile acquisitions don't have the same agreement from the target firm and the acquiring firm needs to actively purchase large stakes of the target company in order to have a majority stake.519 crore ($20 billion) in 2009-10. with consolidated revenues of Rs 92. the acquiring company often offers a premium on the market price of the target company's shares in order to entice shareholders to sell. . TATA MOTORS Tata Motors is India's largest automobile company.and niche compared to expanding on its own. Friendly acquisitions occur when the target firm expresses its agreement to be acquired. News Corp. For example. In either case. the acquiring company's stock or a combination of both.'s bid to acquire Dow Jones was equal to a 65% premium over the stock's market price. Acquisitions are often paid in cash. Through subsidiaries and associate companies. Investopedia explains Acquisition Acquisitions can be either friendly or hostile.
• Passenger cars: The company launched the compact Tata Indica in 1998. Among them is Jaguar Land Rover. Africa. the sedan Indigo in 2002 and the . Areas of business Tata Motors makes passenger cars. buses and trucks are being marketed in several countries in Europe. The company. India's first sports utility vehicle. India's first indigenous light commercial vehicle. Tata Motors is the country's market leader in commercial vehicles and among the top three in passenger vehicles. South Korea. since. the business comprising the two iconic British brands. Tata Safari. Tata Motors has over 1. developed Tata Ace. South Asia. South Korea. India's first indigenously manufactured passenger car. Tata Indica. medium and heavy commercial vehicles. It also has an industrial joint venture with Fiat in India.400 engineers and scientists in six R&D centres in India. It is also the world's fourth largest manufacturer of medium / heavy commercial vehicles. the Middle East.Tata Motors has operations in the UK. Tata cars. South East Asia and South America. and the second largest bus manufacturer. and the Nano. the world's cheapest car. formerly known as Tata Engineering and Locomotive Company. multi-utility vehicles and light. Thailand and Spain. began manufacturing commercial vehicles in 1954 with a 15-year collaboration agreement with Daimler Benz of Germany. Spain and the UK. It has.
100-per cent subsidiary engaged in design engineering and development of products. 12-seaters to 60-seaters. Joint ventures. Utility vehicles: The Tata Sumo was launched in 1994 and the Tata Safari in 1998. Passenger buses: The company also manufactures and sells passenger buses.• • • station wagon Indigo Marina in 2004. medium and heavy segments. Commercial vehicles: The commercial vehicle range extends from the light two-tonne truck to heavy dumpers and multi-axled vehicles in the above 40tonne segment. a 100-per cent subsidiary of Tata Motors in the business of heavy commercial vehicles. Tata Motors European Technical Centre is a UK-based. the Brazilbased maker of bus and coach bodies. subsidiaries. Other associates include: • • Tata Daewoo Commercial Vehicle Company. and with Fiat Auto (to build a commercial vehicle at Fiat's facilities in Córdoba. associates Tata Motors has joint ventures with Marcopolo. Argentina). Tata Motors also distributes Fiat’s cars in India. in the light. .
Hispano Carrocera is a Spanish bus manufacturing company in which Tata Motors has a 21-per cent stake . and Lucknow and Pantnagar (north). . product lifecycle management and product-centric information technology services Tata Motors (Thailand) is a joint venture between Tata Motors (70 per cent) and Thonburi Automotive Assembly Plant Co (30 per cent) to manufacture and market the company’s pickup vehicles in Thailand . Pune and Sanand (west). Location Tata Motors' plants are located at Jamshedpur (eastern India). near Pune. Japan Tata Technologies provides specialised engineering and design services. HV Transmissions and HV Axles are 100-per cent subsidiaries that make gearboxes and axles for heavy and medium commercial vehicles. Tata Motors Finance is a 100 per cent subsidiary in the business of financing customers and channel partners of Tata Motors . Tata Cummins manufactures high horsepower engines used in the company’s range of commercial vehicles . Concorde Motors is a 100 per cent subsidiary retailing Tata Motors’ range of passenger vehicles .• • • • • • • • • Telco Construction Equipment Company makes construction equipment and allied services. TAL Manufacturing Solutions is a 100-per cent subsidiary that provides factory automation solutions and designs and manufactures a wide range of machine tools . Tata Motors has a 60 per cent holding. Tata Motors and Fiat have set up a common manufacturing facility at Ranjangaon. the rest is held by Hitachi Construction Machinery Company.
passenger cars. .Tata Motors is a part of the Tata Group manages its shareholding through Tata Sons. Ltd. acquisition and launched new products in different market segments (i. Tata Motors is also the second largest bus producer in the world. The launching of Tata Nano. Cummis Engine Co. commercial vehicles and utility vehicles). A significant breakthrough for Tata was the development and commercialization of the truly Indian cars and they are Tata Indica (1998) and Tata Indigo (2002). the two iconic British brand have made Tata Motors well known to the people in the world.. Since its establishment in 1945.e. Tata Motors has experienced many joint ventures with Daimler Benz. the world cheapest car and the acquisition of Jaguar and Land Rover.8 billion in the financial year 2008. with the revenues of US$ 8. Inc. In addition. Tata Motors is the largest multiholding automobile company in India and it is the fourth largest truck producer in the world. and Fiat and successfully acquired Daewoo Commercial Vehicle Co. In the year 2008. there were two most significant events which have had a momentous impact on the scale of the Company’s operations and its global image. Tata Motors has grown significantly in the past 60years with the strategies of joint venture.
• India's largest passenger automobile and commercial vehicle. • Tata Motors was established in 1945 • Listed on the New York Stock Exchange in 2004. TATA MOTORS – Company Profile . Telco.TATA MOTORS – A SNAPSHOT • TATA GROUP is 150 year old. Previously Tata Engineering and Locomotive Company.
The automaker was founded by Henry Ford and incorporated on June 16.• It is the 5th largest medium and heavy commercial vehicle manufacturer in the world. Subsidiaries• JAGUAR CARS • LAND ROVER • TATA DAEWOO COMMERCIA Ford Motor Company Ford Motor Company (NYSE: F) is an American multinational automaker based in Dearborn. Ford discontinued the Mercury brand at the end of 2010. 1903. Michigan. In 2010 Ford soldVolvo to Geely Automobile. . Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of India in March 2008. In addition to the Ford and Lincoln brands. Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. listed in BSE. a suburb of Detroit. NSE & NYSE.
Vice-Chairman and CEO of TML sit on Jaguar Land Rover’s board of directors. *TML and Tata Group have supported JLR during the downturn Synergies .Jaguar Land Rover: A core subsidiary of Tata Motors A core subsidiary of TML A core subsidiary of TM *Represents approximately two-thirds of TML’s revenues *Chairman.
*Access to a wider pool of financing banks and sources of funding as part of TML *Access to long-established operational and sales expertise of TML in India *JLR has established a product development operation in India *Since April 2011.3. A growing technical capability *Comprehensive vehicle Product Development capability (5 new models in last 5 years) * Petrol engine engineering and powertrain application capability for petrol and diesel * Product Development staff c. Freelander vehicle kits have been assembled by TML in a complete knock down facility in India.400 * Flexibility to balance resources across product portfolios at different stages of their life cycles * An industry leader in aluminium body structure and allterrain technolog * Leveraging architectures for multiple vehicles * Growing advanced research capability .
UK. is one of the world’s premier manufacturers of luxury saloons and sports cars. Jaguar Land Rover’s manufacturing facilities are in the UK. in Whitley in Coventry and Gaydon in Warwickshire. XJ and XK models are manufactured at the company's Castle Bromwich plant in Birmingham.* Winners of 2008 Queen’s Award for Innovation for Land Rover Terrain Response System Jaguar and Land Rover Jaguar Land Rover is a business built around two great British car brands with exceptional design and engineering capabilities. Land Rover has been manufacturing 4x4s since 1948. Its products have defined the segments in which they operate. founded in 1922. The Jaguar Land Rover business employs over 16. while . Areas of business Jaguar Cars. including some 3. predominantly in the UK. The Jaguar XF. Jaguar Land Rover’s manufacturing facilities are in the UK.500 engineers at two product development centres.000 people.
were sold by Ford to Tata Motors in 2008. Location Jaguar Land Rover is based in the UK. Land Rover's Defender.the Jaguar X-TYPE is produced alongside the Land Rover Freelander 2 at the Halewood plant in Liverpool. Sales to customers are conducted principally through franchised dealers and importers. two of the most iconic British brands. UK. Discovery 3. The business is a major wealth generator for the UK. Jaguar Land Rover: JAGUAR History Jaguar and Land Rover. UK. Here is a potted history of both: . with 78 per cent of Land Rovers exported to 169 countries and 70 per cent of Jaguars exported to 63 countries. Range Rover Sport and Range Rover models are all built at Solihull.
a British all-terrain vehicle manufacturer. is founded as the Swallow Sidecar Company by two motorcycle enthusiasts.Jaguar Cars Limited. and the first Jaguars with high-performance engines are produced. a luxury car manufacturer based in Coventry. 1945 . apparently based on an American jeep from the Second World War. and designed to be field-serviced.Land Rover. . The Land Rover's distinctive bodies were lightweight and rustproof. giving the vehicles a reputation for longevity in tough conditions.Swallow Sidecars changes its name to Jaguar. rolls out its first vehicle. 1947 .1922 .
1968 . The brand then beomes closely linked with Jaguar. 1989 .As car sales tumbled around the world.Although Land Rover became famous for bringing 4x4 capabilities to civilian vehicles. with some models sharing components and production facilities.Land Rover launches the Range Rover. Jaguar Land Rover was forced to seek state loan guarantees from then . 1970 . after almost ten months of negotiations. 1961 . India's biggest vehicle maker. 1988 .Land Rover launches the Freelander.Jaguar undergoes a programme of modernisation and expansion that ensured the broadest product range in the company's history. subsequently taken over by Leyland.Jaguar merges with British Motor Corporation. since the company's beginning all Series and Defender models have been used in a military capacity as well. 2009 . 1950s .Jaguar makes its name with a series of elegant sports cars and premium saloons. for $2. first hit the road.Arguably the most famous sports car of all time.Land Rover launches the Discovery. It never made a profit from Jaguar. 2000 . which itself was later nationalised as British Leyland.Ford buys Land Rover. 1997 . such as the XK 150. 1990s . 1984 . 2008 .Jaguar is acquired by Ford.5bn). the Jaguar E-type.Jaguar is split off from British Leyland and listed on the London Stock Exchange.3bn (£1.Ford sells Jaguar Land Rover to Tata Motors.
JAGUAR– The ups and downs • 1922 .Founded in Blackpool as Swallow Sidecar company • 1975 . Holds Royal warrants. Russia. Company drives towards a £1bn annual profit. with particularly strong performances in North America. Ford’s formula one entry since 1990s • Ford acquired Jaguar for $2.Floated off as a separate co in the stock market • 1990 .In the final quarter of 2010. and China.Nationalized in due to financial difficulties • 1984 . sales of Jaguar Land Rover cars rise 11pc to 63. 2010 .5 billion . It later walked away from negotiations after the Government demanded control over the company's strategy.Business Secretary Lord Mandelson. Rarely advertised.Taken over by Ford • A statement of ultra luxury.155.
Safe but less reliable. • Known for superior off-road performance. .75 bn$ in 2000.75 billion in 2000. Makeover in recent times In 1994 Rover Group is taken over by BMW & sold to FORD MOTORS for 2. Used by military for projects and expeditions.LAND ROVER • Founded in 1948 as a marquee of the Rover Company. • Ford acquired Land Rover for $2.5 billion in 1989. Key issues: • Ford acquired Jaguar for $2.
countless organisations came to depend on Land Rover vehicles to get personnel and equipment into the most challenging situations…and then safely out again. From organisations such as Born Free Foundation to The Royal Geographical Society and Biosphere Expeditions . As a tough. It was a period in which Land Rover took the lead in the emerging market for fourwheel drive vehicles.we enter the second decade of the 21st century with them still relying on Land Rover.6 billion in 2006 THE LAND ROVER STORY The original 1948 Land Rover was ingeniously designed and engineered for extreme capability and strength. With extremely robust construction and characteristics such as short front and rear overhangs. it drove off the production line ready to take on some of the world’s toughest terrain.• But the US auto major put the two marquees on The market in 2007 after posting losses of $12. . reliable mobility platform. Today these qualities are as significant a part of what makes a Land Rover vehicle unique as they were 60 years ago. The Land Rover was the product of continuous evolution and refinement throughout the 1950s and 1960s with improved stability and a tighter turning circle.
Land Rover will remain at the forefront of advanced design – the new small Range Rover is a testament to the vision that takes the company forward and keeps it at the cutting edge of technology and engineering. more refinement. more efficiency and fewer emissions. . And it continues with initiatives such as e_Terrain Technologies (which improves the environmental performance of vehicles by reducing CO2 emissions).Heritage In keeping with the forward-thinking philosophy that founded Land Rover. a radical. This culture of innovation has developed ever since with both Land Rover and Range Rover vehicles: new models. more innovative technology. entirely new product was introduced in 1970 and created its very own vehicle category. It had all the capability of a Land Rover with the comfort and performance of an on-road car. This overnight sensation was the original Range Rover. Sustainable Manufacturing and CO2 Offsetting.
.5 billion in 1989. . is in final discussions with one bidder.KEY ISSUES • Ford acquired Jaguar for $2. • Ford acquired Land Rover for $2. to sell its Jaguar and Land Rover brands and a sale is expected to be completed soon.75 billion in 2000. Ford close to announcing sale of Jaguar and Land Rover Ford Motor Co. • But the US auto major put the two marquees on the market in 2007 after posting losses of $12. Tata has 98 companies in a variety of industries and has been rumoured to be the front-runner for some time.the heaviest in its 103-year history. the Indian conglomerate Tata Group. eager to raise cash starting a difficult 2008.6 billion in 2006 .
. There is still a considerable amount of work to do and." Lewis Booth. the Indian conglomerate Tata Group. executive vice president of Ford of Europe and the Premier Automotive Group. we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks with a view to securing an agreement that is in the best interests of all parties concerned. created in 1999 to serve as the automaker's luxury vehicle division. to sell its Jaguar and Land Rover brands and a sale is expected to be completed soon. Tata has 98 companies in a variety of industries and has been rumoured to be the front-runner for some time. while no final decision has been made. said in a statement. is in final discussions with one bidder. who was one of the bidders for Jaguar and Land Rover as head of One Equity Partners. The Premier Automotive Group. would essentially be dissolved by a sale of the two legendary luxury brands. eager to raise cash starting a difficult 2008.Ford Motor Co.. Former Ford Chief Executive Officer Jacques Nasser. assembled most of PAG during his reign from 1999 to 2001.
Land Rover and Volvo.8 billion. and it was clear Jaguar and Land Rover would be sold together as Ford decided to raise cash to save its ailing North American business. But Ford sold Aston Martin in March 2007 for £430 million. . are more conservative for the combined sale. before Dearborn reclaimed control of it in 2002. For example. amid concerns of neglect.7 billion to £0. While some analysts have speculated Jaguar and Land Rover could fetch as much as £4 billion in a sale. and it is widely expected that Ford will work to further integrate with the company. Ford's Premier Automotive Group controlled Aston Martin. from £0. Volvo is the only non US brand in the group now retained by Ford.. the new Taurus relied substantially on engineering work done by the Volvo team. Both Jaguar and Land Rover are based in Britain and they share management. . Jaguar. engineering.At one time. Lincoln was also part of the division for a brief time. from Merrill Lynch & Co. other estimates. manufacturing and distribution resources.
6 billion in 2006. Ford's so-called Way Forward turnaround plan calls for closing 10 plants. joint ventures and improvement and introduction of new products. But Ford has made it clear that it would shed noncore assets in an effort to raise cash as it tries to restore profits to its troubled North American operations by 2009. it seems to have a promising future. market expansion. Ford bought Jaguar for £1. caused Ford to post a record loss of . But it failed the expectation as the company was in trouble right after the acquisition of Jaguar and Land Rover (JLR) in June 2008 due to the arrival of global financial crisis.That would be substantially less than Ford paid for the two brands. That moneylosing division for the United States. eliminating more than 40. Mercury and Lincoln products. The bridge .000 jobs and revamping the company's lineup of Ford.3 billion in 1989 and Land Rover for £1.4 billion in 2000. Tata Motors has proven excellence over the years through continuous strong financial results. . acquisition. which were acquired during more financially healthy times. Canada and Mexico.
loan of US$ 3 billion which used to fund the acquisition of JLR was due on June 2009 and yet at the end of the year 2008. . Tata was only able to repay the US$ 1billion. The questions arise is That whether Tata Motors able to repay the bridge loan? Will it be able to build up investors’ confidence and increase sales in the future? Could Tata Motors survive or going under bankruptcy? Let us take a look on what makes Ford Motors to make the decision to sell JLR to Tata Motors. The declining revenues and a tight credit conditions was hurting the company’s cash flow.
Why is Ford Selling? *Reports said that losses at Jaguar stood at USD 715 million. on the other hand. *Jaguar was not performing well as it was unable to provide any profit for Ford due to high manufacturing costs in United Kingdom *The wellbeing of Land Rover's profit.” analysts said *that Ford failed to reduce production costs as major proportion of cost is material cost and they unable to bought cheaper materials from suppliers *This however is very different if Tata Motor takes the ownership because they are utilizing country’s vast natural resources. The rationale to acquire JLR Below are the reasons behind Tata Motors’s decision to acquire JLR .000 vehicles. an 18% year over year growth in 2007 *"Bringing down production costs and turning around the company successfully will be the challenge. was boost up by the record sale of 226.
a. Opportunity to participate in two fast growing auto segments (premium and small cars) and to build a comprehensive product portfolio with a global footprint immediately. Land Rover and Tata Motors in the future 6. 2. Long term strategic commitment to automotive sector. 4. Increased business diversity across markets and product segments. low cost engineering and design services. Long-term benefits from component sourcing.b. 3. Jaguar offers a range of “Performance/Luxury” vehicles to broaden the brand portfolio 5.1. Unique opportunity to move into premium segment with access to world class iconic brands 4. . Sharing of best practises between Jaguar. Land Rover provides a natural fit above TML’s Utility Vehicles/SUV/Crossover offerings for the 4x4 premium category 4.
TPG Capital. Ceribrus capital Management. M&M. Apollo Management • • • India’s Tata Motors and M&M arrive as top bidders ($ 2.9b) • 03/01/2008 – Ford announces Tatas as the preferred bidders 26/03/2008 .05b & $ 1. 02/06/2008 – The acquisition is complete • • Jaguar-Land Rover officially sold (2008) .Major bidders are identified Likely buyers: Tata Motors.THE DEAL PROCESS • 12/06/2007.Ford agreed to sell their Jaguar Land Rover operations to Tata Motors. August 2007 .Announcement from Ford that it plans to sell Land Rover and Jaguar.
Smith leaves his full time position as Jag/LR’s chief financial officer. Ford has also coughed up around $600m for Jag/LR’s pension coffers. David Smith had been acting CEO of the company since Geoff Polites passed away in April 2008. all the necessary intellectual property rights. and ownership has now passed from Ford to Tata in exchange for $2. he said: ‘We are very pleased with the association with Tata Motors. We look forward to a sustained bright future for the company and its stakeholders. the manufacturing plants. The sale gives Tata the ownership of Jaguar and Land Rover.Jaguar and Land Rover are now officially Indian-owned. The sale of the two iconic British brands was completed today. The official handover ceremony took place at Gaydon.17bn). Agreements have also been signed for long-term use of Ford engines and future co-operation on hybrids and other powertrain developments..’ The Real Picture. two design centres and the sales chain. with none of the money used to fund the purchase being offset against the pair’s worth.3bn in cash (£1. The sale means Jag/LR is debt-free. with Ratan Tata and new Jag/LR CEO David Smith present. At today's ceremony. • Consumer demand plummeted • Credit lines were frozen .
• Opportunity to participate in two fast growing auto segments. .26 billion • Q3 the sales of passenger vehicles went down to 41.287 units a drop of 14.Luxury cars and all terrain vehicles. • Enhanced human capital and managerial talent.14% • Tata Motors cut production across different categories Analysis Strategic logic • Long term strategic commitment to automotive sector.• Automotive sector in India suffered contraction in deman • Launch of Nano delayed • Tata Motors reeling under a huge debt burden Problems in the Domestic Market • The profits for the first quarter for the year 2008-09 were at 3.
Hyundai Motor. Foreign vehicle makers including Daimler. Nissan Motor.•Improvement in global market position through a combination of resources and strengths. is also facing heat from top car maker Maruti Suzuki India Ltd. engines and transmissions in India. Volvo and MAN AG have struck local alliances for a bigger presence. design services and low cost engineering COMPETITIVE ADVANTAGE • Tata Motors is vulnerable to greater competition at home. • Tata Motors. which has a joint venture with Fiat for cars. Renault and Volkswagen . • Sharing of best practices in manufacturing and quality assurance systems and processes • Benefits from component sourcing.
• Purchasing basket offers bigger opportunity for cost reduction • – It is more important to manage the material & sourcing costs to improve margins – Material Cost is 46x the wage cost for high-end products such as Land Rover.Valuation of deal A] Cost synergies 1] Material costs and not manpower key to better margins.A long-term possibility .TATA group has a a rich ecosystem of JVs with leading players in Auto ancillary space held through TACO. Corus and Incat have varied competencies in the Auto space B] Revenue synergies . 2] Tata Group has multiple levers • Tata Auto Comp (TACO) . • TCS.
consulting services and global sourcing – Major customers are Chrysler.Corus – Leader in automotive grade steel in the European markets – 16% of revenue from auto steel division – Enjoys “Q1” supplier status with Ford to supply steel for Jaguar and Land Rover JLR Tata Consultancy Services – Provides services like engineering design. Engineering and Supply chain management – Customers include Global OEMs like Ford. Honda and Nissan Approach to acquisition • 12/06/2007. FIAT Tata Steel . Daimler. Chrysler. Ford.Announcement from Ford that it plans to sell Land Rover and Jaguar. GM. .• In the long-run Tata Group and Tata Motors footprint in South-East Asia should help Jaguar/Land Rover diversify their geographic dependence from US (30% of volumes) and Western Europe (55% of volumes) COST SYNERGIES Tata auto component – Flagship company of TAMO’s ancillary biz – Manufacturing. Ford. manufacturing solutions and sourcing services – Automotive division accounted for 15% revenues – Major customers are Chrysler. GM INCAT – Provides services like supplier programs.
TPG Capital. Apollo Management • India's Tata Motors and M&M arrived as top bidders ($ 2. • £ 1 billion aid package by British Government .( out of total £ 2.Major bidders are identified Likely buyers: Tata Motors.• August 2007 . M&M. • The amount was repaid in following manner • Rs 1. Ceribrus capital Management. • Additional amount of US $ 0.Tata sons.9b) • 03/01/2008 – Ford announces Tatas as the preferred bidders • Tata motors raised a bridge loan of US $ 3 billion through syndicate of banks. contingencies and working capital.3 billion ) .7 billion was for engine and component supply. Tata capital and Tata Investment Ltd.05b & $ 1.92 billion Underwriting agreement with JM financial consultants • Rs 1.75 billion was raised through a deposit scheme from the public • Additional subscriptions by promoter companies.
Voluntary retirement to 600 employees. -Additional 450 job cuts including 300 managers. 9] Reduction in all other non-personnel related overhead costs. 3] Receivables reduced by £133 million from 38 to 27 days.Agency staff reduced by 800. . -Offered leaves to 300 workers of Bromwhich and solihull plant. 4] Inventory reduced by £217m between June 2008 and March 2009 from 70 to 50 days 5] Labor actions – . 2] Supplier payment terms extended from 45 to 60 days in line with industry standard. . 6] Agreement with Unions to implement pay freeze and longer working hours (equivalent to approximately 20% reduction in labor costs.Post merger • Following Cost Rationalisation initiatives were taken to improve cash flows: 1] Single shifts and down time at all three UK assembly plants.) 7] Engineering and capital spending efficiencies. 8] Fixed marketing and selling costs reduced in line with sales volume.
prototype design & powertrain Engineering . Intellectual property rights -This covers all key technologies to be transferred to JLR & perpetual royalty free license on technologies shared with Ford Capital Allowance -A minimum guaranteed amount of $1.Evaluation THE DEAL 100% stake in Jaguar & land Rover Business -TAMO has acquired the business & initially they will be operated independently of the partner.1 bn which will help managing in Tax going forward . development & integration 26 National sales company -Both existing national sales companies of jaguar/land rover & also those that are carved out of current Ford operation. 3 Plants in UK -These are well invested plants 2 advanced design & engineering center -4-5000 engineers engaged in testing .
Support from Ford Motor Credit –Ford Motor Credit will continue to support the sales of JLR for around next 12 months Pension Contributed by Ford -Ford will contribute $ 600 mn of the Pension Fund Fund Raising (7200 Crore) Ordinary Equity Shares Full Voting Right (2200 Crore) • A-Class Equity Shares .
2% • Lack of consumer loans . is raising money by issuing shares with differential voting rights • 5 Year 0.5% Convertible Preference Shares • Optionally convertible into A equity shares after 3years but before 5years from the date of allotment • (3000 Crore) Problems • Drop in share prices • Failure of rights issue • Huge debt burden • Sales volume decreased by 35.• 1 Vote for every 10 A-Class Equity Shares • (2000 Crore) • This is the first time a major Indian Co.
• This acquisition also eases the entry of Tata in European market which it has been eyeing for long.29bn ($67 million) for the quarter to end-June • Tata’s core commercial vehicles market in India is also suffering from slower sales • Extremely high manufacturing costs in Britain • Eliminated more than 2. will give better value later on.200 jobs Benefits • Tata wanted to make a global impact and it thinks that buying these brands at a lower rate now.• Issue of timing • Operational freedom slows pace of change • Depressed state of the global premium car market • Jaguar/Land Rover lost 306 million pounds ($504 million) for the fiscal year ending March 2009 • Tata Motors reported a net loss of Rs3. this will further help them penetrate EU market . A previous JV with FIAT took place.
Audi. it seems Tata has just got the right place to compete with the current market leaders – BMW. Mercedes • Publicity on an international scale • Access to large distribution network • JLR had many new models lined up for next 3 years. engineering and design benefits . engineering and design benefits • JLR had many new models lined up for next 3 years. so no much work just profits • Strong R & D culture and facilities • Component sourcing. so no much work just profits • Strong R & D culture and facilities • Component sourcing.• Reduce the company dependence on the Indian market which accounted for 90% of its sales • Increase sales in emerging markets • Reduce dependence on mature markets • Opportunity to spread its business across different customer segment • At the price staring from 63 lakh and going upto 93 lakh.
Lexus and Infinity .Engine.SWOT Strengths: • Tata’s strong management capability • Strong monetary base to invest Weaknesses: • Jaguar’s declining sales record • Inexperience of handling such luxury brands Opportunities: • Support from Ford in terms of Technology. BMW. Accounting • Adding up of luxury brands in the product line • Access to European Market Threats • Market is volatile and driven by new products • Strong presence of competitors like Mercedes. IT.
Recommendations Partnering • Keep acquisition structurally separate • Maintain it’s identity • Hunt for synergies in selected areas – Procurement synergies • Prevent their own antecedents from clouding established brands • Share operational Know-how • Operational Autonomy Business transformed over last five years Jaguar .
1.794. net revenues and cost structure •Jaguar sales for the month were 4.900 employees 2004-2007) •Working capital actions (stock reductions – dealer and company) •Back-office integration with Land Rover – SG&A efficiencies •Residual value management •Engineering efficiencies •Material cost reductions •Launched new range of diesel engines •Refocused marketing and communications around Beautiful Fast Cars •Launch of XK & XF and more in pipeline •Significant improvement in underlying results. higher by 5%. Land Rover .•Cessation of vehicle assembly operations at Browns Lane •Halewood shared with Land Rover •Workforce rationalisation (c.
200 employees 2004-2007 ) •Working capital actions (stock reductions – dealer and company) •Engineering efficiencies •Material cost reductions •Adoption of Jaguar petrol engines and new range of diesel engines with Jaguar •Launch of new Discovery. China •Quality improvement actions •Profitable for the last three years •Land Rover sales were 16. higher by 45% .2.340.•Improved efficiency and quality at Solihull •Workforce rationalization (c. Range Rover Sport and new Freelander •Growth in new markets – Russia.
Bibliography Wikipedia http://www.jaguar.in/ http://www.slideshare.in/ http://www.com/investors http://www.net .tatamotors.landrover.
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