Tata Motors acquired Jaguar and Land Rover from Ford Motor Company in 2008 for $2.3 billion. The acquisition provided Tata Motors with two iconic British luxury brands and expanded their global presence. Tata Motors raised funds through loans and share sales to finance the large acquisition. Following the purchase, Tata Motors implemented cost rationalization measures at Jaguar and Land Rover to improve profitability. These measures included job cuts, extending supplier payment terms, and reducing inventory levels. By 2011, Jaguar and Land Rover were profitable under Tata Motors' ownership.

1. TATA’s JAGUAR & LANDROVER ACQUISITION

2. TATA MOTORS, JAGUAR & LAND ROVER
OVERVIEW

4. TATA MOTORS OVERVIEW
 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

6. JAGUAR OVERVIEW
 JLR was a part of Ford's Premier Automotive Group (PAG)
and were considered to be British icons.
 Jaguar was involved in the manufacture of high-end luxury
cars
 Jaguar Cars Ltd. ( better known simply as Jaguar) is an
automaker from England,
 United Kingdom that manufactures luxury and executive
motor car.
 Sir William Lyons founded jaguar as the Swallow Sidecar
Company in 1922, originally making motorcycle sidecars
before switching to passenger cars.
 The name was changed to Jaguar after the second world
war due to the unfavorable connotations of the SS initials.

8. LAND ROVER OVERVIEW
 British car manufacturer founded in 1948 as a marquee
of the Rover Company.
 Known for superior off-road and road performance
 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
 Land Rover manufactured high-end SUVs.

10. Reports said losses at Jaguar stood at USD 715
million in 2006.
Jaguar was not able to provide any profit for
ford because of the high manufacturing costs
provided in the United Kingdom.
The strong boy 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 was combining both the brands since the
products and manufacturing of vehicles for
Land Rover and Jaguar was so intertwined.

12. Long term strategic commitment to automotive
sector.
 Opportunity to participate in two fast growing
auto segments.
 Increased business diversity across markets and
products.
Land rover provides a natural fit for TML’s SUV
segment.
 Jaguar offers a range of “performance/luxury”
vehicles to broaden the brand portfolio.
 Benefits from component sourcing, design
services and low cost engineering

13. THE DEAL PROCESS

14.  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 Tata’s as the
preferred bidders
 26/03/2008 - Ford agreed to sell their Jaguar
Land Rover operations to Tata Motors.
 02/06/2008 – The acquisition is complete

15. 100% stake in Jaguar &
land Rover Business
TAMO has acquired the business & initially they will be operated
independently of the partner.
3 Plants in UK These are well invested plants
2 advanced design &
engineering center
4-5000 engineers engaged in testing ,prototype design & powertrain
Engineering , 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
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 $1.1 bn which will help managing in
Tax going forward
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

16. FUNDING

17. Auto major Tata Motors planned to raise nearly Rs 4,000 crore by selling securities in the
domestic and international markets to part finance its imminent acquisition of Jaguar and
Land Rover from Ford Motor.
The Tata Motors board approved the fund raising proposal. “The funds were raised to part-
finance overall funding requirements to meet some of the strategic plans,”
PLANS
• Plans for expanding its position in the domestic and global markets in both the
commercial vehicle and passenger vehicle business. This was achieved by upgrading and
enhancing the company’s product portfolio, expanding manufacturing facilities in India
and strategic acquisitions and alliances in India and abroad”.
• While the organic growth plan required money over the next 3 to 4 years, the
acquisition opportunities were to be financed up front. A source close to the
development said Tata Motors would “borrow from financial institutions” to finance the
Land Rover-Jaguar deal. The proceeds from the proposed share sale will be utilised to
repay the loan, he added.

18. The Tata’s - planned to fork out over $2 billion for the
acquisition of these marquee brands, which Ford had put on
the block to shore up its balance sheet and reduce debt.
ET Reports
On February 25 : Tata Motors started the process of raising
nearly $2.5 billion, mostly from the overseas markets, by giving
the mandate to a battery of banks including Citi and JP
Morgan, Standard Chartered, BNP Paribas and SBI.
Funds were raised against the balance sheet of Tata Motors. In
other words, the borrowing would have an impact on the
balance sheets of Jaguar and Land Rover.
Tata and Ford were expected to sign an MoU in the next few
weeks. Ford had announced that Tata Motors was the
preferred bidder on January 3.

19. Jaguar had shown Tata Motors its new model lines and found
the Indian automobile giant ‘respectful’ of its plans. It was
learnt that Ford managed to convince Unite, the union
representing Jaguar and Land Rover workers, on its plan to sell
these two brands in their entirety. Unite was earlier of the
opinion that Ford should retain minority interest in these
brands.
Tata Motors Managing Director Ravi Kant said :
• That the company had taken bridge loans of $3 billion to
fund the acquisition of the two British luxury brands.
• He said the company planned to replace the bridge loans
with long-term debts and equity contribution with funds to
be raised through divestment in group companies.

20. POST MERGER

21. Following Cost Rationalization initiatives were taken to improve cash flows:
 Single shifts and down time at all three UK assembly plants.
 Supplier payment terms extended from 45 to 60 days in line with industry standard.
 Receivables reduced by £133 million from 38 to 27 days.
 Inventory reduced by £217m between June 2008 and March 2009 from 70 to 50 days .
 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.
 Agreement with Unions to implement pay freeze and longer working hours (equivalent
to approximately 20% reduction in labor costs.)
 Engineering and capital spending efficiencies.
 Fixed marketing and selling costs reduced in line with sales volume.
 Reduction in all other non-personnel related overhead costs.

22. POST ACQUISITION PERFORMANCE

23. JLR’s FINANCIAL PERFORMANCE
Year ending Turnover (£m) EBITDA (£m)
Net income /
(loss) before tax
(£m)
Net income /
(loss)
attributable to
shareholders
(£m)
31 March 2009 4,949.5 (83.9) (375.7) (402.4)
31 March 2010 6,527.2 349.1 51.4 23.5
31 March 2011 9,870.7 1,501.7 1,114.9 1,035.9
31 March 2012 13,512 2,027 1,507 1,481
31 March 2013 15,785 2,402 1,675 1,215

24. SWOT

25. 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, Engine, IT,
Accounting
Adding up of luxury brands in
the product line
Access to European Market
Market is volatile and driven
by new products
Strong presence of competitors
like Mercedes, BMW, Lexus
and Infinity
Tata’s Jaguar
Land Rover
Acquisition
Threats

26. WORDS OF MR. RATAN TATA

27. “We have enormous respect for the
two brands and will endeavor to
preserve and build on their heritage
and competitiveness, keeping their
identities intact.”