Tata Motors acquired Jaguar Land Rover from Ford in 2008 for $2.3 billion. This was a major acquisition for Tata that helped them expand globally. Post acquisition, Tata Motors implemented several cost cutting measures at JLR's UK plants to improve cash flows, including reducing production shifts, extending supplier payment terms, and offering voluntary retirement to some employees. Going forward, Tata Motors plans to grow JLR's business through new product development, expanding into new markets like China, and increasing marketing and dealerships globally to better compete with other luxury brands.

1. TATA-JLR Deal
Group Members
• Ketan Jadhav-07
• Sneha Joshi- 10
• Mahesh Korvi-13
• Rajesh Umbarkar-20
• Vihang Varwate- 21

2. PANEL DISCUSSION ON
TATA -JAGUAR -LAND ROVER
DEAL

3. What is Merger
&
Acquisition?

4. Merger and Acquisition
• Mergers and acquisitions (abbreviated M&A) refers to
the aspect of corporate strategy, corporate finance and
management dealing with the buying, selling and
combining of different companies that can aid, finance,
or help a growing company in a given industry grow
rapidly without having to create another business
entity.

5. M&A Activities in India:
• In 2007, there were a total of 676 M&A deals
• Tata steel buys Corus Plc : 12.1$ billion
• Hindalco acquired novelis: 6$ billion
• Tata buy jaguar and land rover : 2.3$ billion
• Essar steel buys Algoma Steel: 1.58$ billion
• Vodafone buys hutch : 11$ billion
• In year 2008..
 M&A deals in India in 2008 totaled worth USD 19.8 bn
 Less compared to last year which stood at 33.1 bn $.
 Decline of M&A activity was in line with the global activity.

6. JLR-One more step towards a Global
Footprint

7. ABOUT TATA MOTORS

8. TATA MOTORS – A SNAPSHOT
• TATA GROUP is 150 year old, Previously Tata Engineering and
Locomotive Company, Telco.
• India's largest passenger automobile and commercial vehicle.
• Tata Motors was established in 1945
• Listed on the New York Stock Exchange in 2004.
• It is the 5th largest medium and heavy commercial vehicle
manufacturer in the world. listed in BSE, NSE & NYSE.
Subsidiaries-
• JAGUAR CARS
• LAND ROVER
• TATA DAEWOO COMMERCIAL

9. JAGUAR– The ups and downs
• 1922 - Founded in Blackpool as Swallow Sidecar company
• Jaguar made its name by producing a series of eyecatching sports
car such as XK120 of 1941, E type of 1961
• 1975 - Nationalized in due to financial difficulties
• 1984 - Floated off as a separate co in the stock market
• 1990 - Taken over by Ford , Ford acquired Jaguar for $2.5 billion
• 1999- it became part of fords new premier automotive group along
with Aston Martin, Volvo cars
• A statement of ultra luxury, Holds Royal warrants, Rarely
advertised, Ford’s formula one entry since 1990s

10. LAND ROVER
• British car manufacturer founded in 1948 as a marquee of
the Rover Company.
• Known for superior off-road and road performance
• 1967 – become part of LMC
• 1976 – 1 million cars running on the road
• In 1994 Rover Group is taken over by BMW
• sold to FORD MOTORS for $ 2.75 b in 2000.
• Used by military for projects and expeditions, Safe but less
reliable, Makeover in recent times
• Expanding worldwide…….

11. Why is Ford Selling?
• Reports said losses at Jaguar stood at USD 715 million in
2006.
• Bringing down production costs and turning around the
company successfully will be the challenge-Its a test that
Ford failed.
• The Land Rover's profit, on the other hand, was driven
by the record sale of 2.26 lakh vehicles, an 18% YoY
growth in 2007
• Ford is combining both the brands

12. THE DEAL PROCESS
• 12/06/2007- Announcement from Ford that it plans to
sell Land Rover and Jaguar.
• August 2007 - Major bidders are identified
• Likely buyers: Tata Motors, M&M, Ceribrus capital
Management, TPG Capital, Apollo Management
• India’s Tata Motors and M&M arrive as top bidders ($ 2.3b
& $ 1.9b)
• 03/01/2008 – Ford announces Tatas as the preferred
bidders
• 26/03/2008 - Ford agreed to sell their Jaguar Land Rover
operations to Tata Motors.
•

13. Why TATA buying?
• Tata wanted to make a global impact and it thinks that buying
these brands at a lower rate now, will give better value later
on.
• This acquisition also eases the entry of Tata in European
market which it has been eyeing for long.
• Reduce the company dependence on the Indian market which
accounted for 90% of its sales
• Opportunity to spread its business across different customer
segment

14. Why TATA buying?
• At the price staring from 63 lakh and going upto 93 lakh, it
seems Tata has just got the right place to compete with the
current market leaders in luxury brands – BMW, Audi,
Mercedes
• Publicity on an international scale
• Access to large distribution network
• JLR had many new models lined up for next 3 years, so no
much work just profits
• Strong R & D culture and facilities

15. THE DEAL

16. SWOT

17. THE DEAL
100% stake in Jaguar & TAMO has acquired the business & initially they will be operated
land Rover Business independently of the partner.
3 Plants in UK These are well invested plants
2 advanced design & 4-5000 engineers engaged in testing ,prototype design & powertrain
engineering center Engineering , development & integration
26 National sales Both existing national sales companies of jaguar/land rover & also those
company that are carved out of current Ford operation
Intellectual property This covers all key technologies to be transferred to JLR & perpetual
rights royalty free license on technologies shared with Ford
Capital Allowance A minimum guaranteed amount of $1.1 bn which will help managing in
Tax going forward
Support from Ford Ford Motor Credit will continue to support the sales of JLR for around
Motor Credit next 12 months
Pension Contributed Ford will contribute $ 600 mn of the Pension Fund
by Ford

19. Problems in the Domestic Market
• The profits for the first quarter for the year
2008-09 were at 3.26 billion
• Q3 the sales of passenger vehicles went down to
41,287 units a drop of 14.14%
• Tata Motors cut production across different
categories.

20. Tata Motors’ Financial
Performance
(In Rs. Million)
Q3FY09 Q3FY08 9MFY09 9M FY 08
Revenue 47,586.2 72,518.3 187,659.2 199,813.0
EBITDA 916.5 8,197.4 11,186.3 21,608.6
Profit before Tax (4191.5) 6651.0 2839.5 18,784.2
Net Profit (2632.6) 4990.5 4098.4 14,926.5
Volume Summary
Total Commercial Vehicles 49,546 82,5568 195,192 215,313
Total Passenger Vehicles 42,187 49,284 142,507 153,475
Exports 7,027 12,756 29,177 40,488
Total Volumes 98,760 144,608 366,876 409,276

21. Post merger
• Following Cost Rationalisation initiatives were taken to
improve cash flows:
1] Single shifts and down time at all three UK assembly
plants.
2] Supplier payment terms extended from 45 to 60 days
in line with industry standard.
3] Receivables reduced by £133 million from 38 to 27
days.
4] Inventory reduced by £217m between June 2008 and
March 2009 from 70 to 50 days .

22. Contd..
5] Labor actions –
- Voluntary retirement to 600 employees.
- Agency staff reduced by 800.
-Offered leaves to 300 workers of Bromwhich and solihull plant.
-Additional 450 job cuts including 300 managers.
6] Agreement with Unions to implement pay freeze and longer working hours
(equivalent to approximately 20% reduction in labor costs.)
7] Engineering and capital spending efficiencies.
8] Fixed marketing and selling costs reduced in line with sales volume.
9] Reduction in all other non-personnel related overhead costs.

23. Recommendations

24. Partnering
• Keep acquisition structurally separate
• Maintain it’s identity
• Share operational Know-how

25. Current Status
• Successful Financial Year
• Record Revenues & earnings
• Net Income growth
• Volume growth

26. Future Plans
• Grow the business through new products &
market expansion
• Started assembling Land Rover vehicles at
Pune Plant
• The company is also seeking to establish a
manufacturing base in China.
• JLR to spend 8.2 mn over the next 5 years to
compete more effectively with Audi, BMW,
Mercedes Benz

27. • Transform the business structure to deliver
sustainable returns
• Investment in product development and
technology to maintain high quality
• The company aims to increase its marketing
and dealer network in emerging markets

28. Thank You