Jlr
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Ford announced in 2007 that it planned to sell Jaguar and Land Rover. Tata Motors and Mahindra & Mahindra emerged as top bidders and in 2008, Ford selected Tata as the preferred bidder. Tata completed the acquisition for $2.3 billion. Tata aimed to gain international distribution and a broader product range through the acquisition. Following the deal, Tata implemented cost rationalization measures like job cuts and extended supplier payment terms to improve Jaguar Land Rover's cash flows. While the financial crisis impacted luxury car demand, Jaguar Land Rover became profitable again by 2010 and is now seen as a successful acquisition.
Jlr
- 1. Ankit Choudhary Anupam Saxena Rituparna Datta Rohit Pareek Sagar Jogani Sunil Kheria
- 2. 12/06/2007- Announcement from Ford that it plans to sell Land Rover and Jaguar 08 2007 - Major bidders were identified Tata Motors , M&M, Ceribrus capital Management, TPG Capital, Apollo Management Indias Tata Motors and M&M arrived as top bidders ($ 2.05b & $ 1.9b) 03/01/2008 Ford announces Tata as the preferred bidders 26/03/2008 - Ford agreed to sell their Jaguar Land Rover operations to Tata Motors.(2.3b) 02/06/2008 The acquisition was complete MOTIVES OF TAKEOVER Provide significant potential for revenue synergy including giving TATA greater international distribution broader product range and better customer service skills Tata gains access to world class engineering capability Strengthens relationship b/w Tata steel and motoring business
- 3. Following Cost Rationalisation 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 贈133 million from 38 to 27 days. Inventory reduced by 贈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.)
- 5. SHARE PRICE MOVEMENT IN 2008 SHARE PRICE MOVEMENT IN 2010
- 6. Benefits 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 Increase sales in emerging markets. Reduce dependence on mature markets Opportunity to spread its business across different customer segment 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 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 Component sourcing, engineering and design benefits
- 8. The merger seemed poorly timed Demand for luxury cars collapsed as a result of financial crisis Started making profits in 2010 upto 41 % Now an example of a successful merger Entered CHINA in march 2012 with a joint venture with Chery automobiles