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  • M & A Case Study of Tata Motors' Acquisition of Jaguar Land Rover

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    Sandeep Singh
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    Tata Motors acquired Jaguar Land Rover from Ford Motors in 2008 for $2.3 billion. [1] Jaguar was struggling under Ford with losses of $715 million in 2006. [2] Tata wanted to expand into the luxury vehicle market and gain access to new technology. [3] However, the global financial crisis severely impacted Jaguar Land Rover's sales and Tata's finances. [4] Tata struggled to repay acquisition loans and faced difficulties entering credit markets during the economic downturn.

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    M&A Case Study Assignment

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    Tata Motors acquired Jaguar Land Rover from Ford Motors in 2008 for $2.3 billion. [1] Jaguar was struggling under Ford with losses of $715 million in 2006. [2] Tata wanted to expand into the luxury vehicle market and gain access to new technology. [3] However, the global financial crisis severely impacted Jaguar Land Rover's sales and Tata's finances. [4] Tata struggled to repay acquisition loans and faced difficulties entering credit markets during the economic downturn.

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    31 views9 pages

    M & A Case Study of Tata Motors' Acquisition of Jaguar Land Rover

    Uploaded by

    Sandeep Singh
    Tata Motors acquired Jaguar Land Rover from Ford Motors in 2008 for $2.3 billion. [1] Jaguar was struggling under Ford with losses of $715 million in 2006. [2] Tata wanted to expand into the luxury vehicle market and gain access to new technology. [3] However, the global financial crisis severely impacted Jaguar Land Rover's sales and Tata's finances. [4] Tata struggled to repay acquisition loans and faced difficulties entering credit markets during the economic downturn.

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    © All Rights Reserved
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    of 9

    M & A Case Study

    Merger & Acquisitions –


    Case Study

    By: Sandeep Singh


    Acquisation Strategy
    Tata Motors Jaguar Land Rover
    Tata Motors Jaguar & Land Rover
    Deal

    In June 2008, TM, Tata Motors In 2006, losses at Jaguar Cars was Ford Motors
    announced the wanted to Jaguar stood at founded in 1922 by acquired Jaguar
    acquisition of the expand its $715 million. Mr Willam Walmsley in 1989 for $2.5
    two– Jaguar and Jaguar was not & Willam Lyons as
    Land Rover (JLR)
    product performing well for “Swallow Sidecar
    Billion and Land
    from the US-based portfolio and Ford due to high Company”. Land Rover in 2000
    Ford Motors for diversify its manufacturing Rover was founded for $2.75 Billion.
    US$2.3 billion market base. costs in UK in year 1978

    3
    Rationale To Acquire JLR
    Gets two advance design
    To enter in to the high studios and technology.
    end premier segment Help TM access to latest
    of the global technology which would
    help to improve their core
    automobile market. products.

    The cost competitive


    advantage as Tata Corus was
    the main supplier of
    automotive high grade steel to
    JLR and other automobile
    industry in US and Europe.

    4
    SWOT Analysis
    Opportunities Threats Strengths Weaknesses

    Demand of luxury
    Volatility in market Tata’s strong management
    automobiles in growing capability
    markets like India and China driven by new products Inexperience in
    Strong monetary base to Handling luxury
    Strong presence of
    Support from Jaguar competitors like Mercedes,
    invest automobile brand
    in Technology BMW, Lexus and Infinity
    Synergy due to Corus,
    TACO and TCS
    Complete product line with Receding sales and Incorrect Timing
    addition of luxury brands brand image Experience in growing
    market like India of Acquisition
    Access to European High interest rate Investment
    due to
    New product development and
    and American Market riskier and costlier brand building experience economic crisis

    5
    Problems Faced Due to
    Acquisitions
    Lack of access to credit to repay the bridge
    • loan of US$3 Billion. TM was finding it difficult
    to access credit and raise fund from the stock
    market due to the tight liquidity conditions.
    •
    Global financial crisis has severely impacted the
    global automobile industry especially the luxury cars
    • segment Subprime mortgage crisis. The Company’s
    export was declined by 38.6% during the year 2009,
    due to the meltdown in major international markets .

    Increasing materials and fuel


    prices have slow the demand
    of vehicles

    Share price dropped drastically


    and affect its global image

    6
    Conclusion
    oPost acquisition due to slowdown in domestic and world economy demand of
    commercial as well as passenger vehicle decreased
    oThis acquisition will help the company to develop its brand in luxury passenger
    vehicle
    oThe opportunity came to Tata motors for the acquisition is also the result of
    economic downtrend
    oTata motors strength, that is their managerial competencies along with
    experience of large market like India, great brand and financial base help them to
    take such strategic decision
    7
    Thanks !!!!
    Appendix

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