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How Do M&As Inspire Innovation?


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A presentation made by R Gopalakrishnan at a Rajiv Gandhi Centre event at Imperial College Business School on 10 November 2008

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How Do M&As Inspire Innovation?

  1. 1. “ How do M&As inspire Innovation” R Gopalakrishnan ‘ Conversation with India’ Imperial College Business School London Nov 10, 2008
  2. 2. What Innovation is - (1) Impact of Innovation Low High Organizational Evolution High
  3. 3. What Innovation is – (2) Four types of Innovation Difficulty of Replication Footprint of Impact
  4. 4. M&A Lessons – (1) Partnership Mode Mindset Share Tell Conqueror Expander
  5. 5. M&A Lessons – (2) The connection between the domestic core business and the overseas expansion should be clear, defined and pursued with persistence The post merger integration & processes must be consistent with the strategic intent of the acquisition The absolute core and non-negotiable values of the acquiring company need to be explicit to the acquired company managers The positioning of the business in the host country should be harmonious with the actions of the company It is important to engage with the society in which the business is located, even if level of engagement is small
  6. 6. M&A Lessons – (3) Cross-Border M&A with regards to Commercial Vehicles Cross-Border M&A with respect to Social Application Cross-Border Acquisition through the Leveraged Buy-Out route
  7. 7. M&A Lessons – TATA Novus (1) Tata Motors Acquired Daewoo Commercial Vehicle Co on 29th March 2004
  8. 8. M&A Lessons – TATA Novus (2) <ul><li>Mainly on-road application </li></ul><ul><li>Strong product support </li></ul><ul><li>Mainly off- road application </li></ul><ul><li>Limited Product support </li></ul>High-end tippers: European Origin Expensive, difficult to maintain Conventional tippers: Indian Origin Limited speed and Gradeability
  9. 9. Produced in an exclusive facility jointly set up by South Korean & Indian teams at Jamshedpur M&A Lessons – TATA Novus (3) Power & performance of High-end tippers Economy & Support of Conventional tippers
  10. 10. Tata Chemicals acquired Magadi Soda in 2006 M&A Lessons – Magadi Soda (1)
  11. 11. M&A Lessons – Magadi Soda (2) Tata Chemicals learning from Masai Leaders Masai leaders learning from Tata Chemicals
  12. 12. M&A Lessons – Leveraged Buyout (1) <ul><li>In 2000, Tata Tea acquired Tetley in the largest cross-border deal by Indian company. </li></ul><ul><li>Tetley was four times the size of Tata Tea </li></ul><ul><li>1 st Leveraged Buy-out (LBO) by Indian Company </li></ul>
  13. 13. M&A Lessons – Leveraged Buyout (2) TATA have applied the LBO route to other Acquisitions
  14. 14. Thank You…