Tata Motors' Acquisition of Jaguar and Land Rover
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Case Details:
Case Code : BSTR313
Case Length : 18 Pages
Period : 2007-2008
Pub Date : 2009
Teaching Note : Available
Organization :
Tata Motors, Jaguar, Land Rover, and Ford Motors
Industry :
Automobiles
Countries : India/UK/US
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
The Challenges
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Morgan Stanley reported that JLR's acquisition appeared negative for Tata Motors, as it had increased the earnings volatility, given the difficult economic conditions in the key markets of JLR including the US and Europe. Moreover, Tata Motors had to incur a huge capital expenditure as it planned to invest another US$ 1 billion in JLR. This was in addition to the US$ 2.3 billion it had spent on the acquisition. Tata Motors had also incurred huge capital expenditure on the development and launch of the small car Nano and on a joint venture with Fiat to manufacture some of the company's vehicles in India and Thailand. This, coupled with the downturn in the global automobile industry, was expected to impact the profitability of the company in the near future...
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The Road Ahead
Tata Motors had formed an integration committee with senior executives from the JLR and Tata Motors, to set milestones and long-term goals for the acquired entities. One of the major problems for Tata Motors could be the slowing down of the European and US automobile markets. It was expected that the company would address this issue by concentrating on countries like Russia, China, India, and the Middle East...
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Exhibits
Exhibit I: International Acquisitions by Tata Group
Exhibit II: Assets and Liabilities - Jaguar Land Rover
Exhibit III: Jaguar and Land Rover - Worldwide Sales
Exhibit IV: Jaguar Land Rover - Financial Performance
Exhibit V: Tata Motors - Stock Price Chart
Exhibit VI: Tata Motors - JLR Acquisition Structure
Exhibit VII: Jaguar and Land Rover New Products Pipeline |
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