Tata Motors' Acquisition of Jaguar and Land Rover
Case Code: BSTR313
Case Length: 18 Pages
Pub Date: 2009
Teaching Note: Available
Organization: Tata Motors, Jaguar, Land Rover, Ford Motors
Countries: India, UK, US
Themes: Globalization, Standardization, Localization, Cultural issues
Abstract Case Intro 1 Case Intro 2 Excerpts
Acquisition of British Icons
On June 02, 2008, India-based Tata Motors completed the acquisition of the Jaguar and Land Rover (JLR) units from the US-based auto manufacturer Ford Motor Company (Ford) for US$ 2.3 billion, on a cash free-debt free basis.
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, while Land Rover manufactured high-end SUVs.
Forming a part of the purchase consideration were JLR's manufacturing plants, two advanced design centers in the UK10, national sales companies spanning across the world, and also licenses of all necessary intellectual property rights. Tata Motors had several major international acquisitions to its credit. It had acquired Tetley, South Korea-based Daewoo's commercial vehicle unit, and Anglo-Dutch Steel maker Corus (Refer to Exhibit I for the details of the group's international acquisitions). Tata Motors' long-term strategy included consolidating its position in the domestic Indian market and expanding its international footprint by leveraging on in-house capabilities and products and also through acquisitions and strategic collaborations.
Analysts were of the view that the acquisition of JLR, which had a global presence and a repertoire of well established brands, would help Tata Motors become one of the major players in the global automobile industry.
On acquiring JLR, Ratan Tata, Chairman, Tata Group, said, "We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business." Ford had bought Jaguar for US$ 2.5 billion in 1989 and Land Rover for US$ 2.7 billion in 2000. However, over the years, the company found that it was failing to derive the desired benefits from these acquisitions...
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