Professional Documents
Culture Documents
Group 6
1502048 - Bholanath Mallick
1502051 - Chandan Kumar Das
1502054 - Chiranjeev Nag
1502096 - Kundan Kumar
1502136 - Prathamesh D. Kesarkar
1502152 - Ravina Gupta
1502180 - Satwik Varma
1502193 - Shrikant Patil
1502229 - Varun Kumar Gupta
1502236 - Vivek Kumar
1502239 - Yogesh Khairnar
1502240 - Yogesh Yeole
Feb TATA Sons & TATA Tea acquired Tetley group of United Kingdom
2000 Acquisition Value was $ 433.6 Million with 100 % stake
July
2003 VSNL acquired Gemplex of United States
Nov VSNL acquired US based Tyco Global network for $ 130 Million
2004
Oct TATA tea acquired US based firm good earth corporation for $ 31 Million
2005
March
2004 Daewoo commercial vehicle acquired by TATA Motors for $ 102 Million
Feb TATA steel acquired Singapore based Natsteel Asia for $285.4 Million
2005
TATA Group Recent Acquisitions
TATA steel a group company acquired UK based
Corus in the year 2007
TATA group had to pay around $ 12.1 Billion for
this deal
The main competitor was Companhia siderugica
Nacional (CSN) a Brazilian firm which laid TATAs
to pay 33.6% more than the initial bid.
After the acquisition share price was down by
About Jaguar
10.7%& Land Rover
Land Rover & Jaguar were British automotive
brands owned by Ford Motor company
These were the western luxury car brands
Jaguar was making a loss and TATA Motors along
with Mahindra & Mahindra was keen to acquire
this firm
Land Rover & Jaguar have their own technology
Tata Group : Overview
Global Business group with history of 139 years
Product and services in over 150 countries
Employee count : 660,800
Operations in over 100 countries
Group Revenue : $103.51bn
67.3% of revenue generated from outside INDIA
Tata Group : Rise to
power
Founded as trading firm in 1868 by Jamsetji Nusserwanji Tata
1877 : Started Empress Mills, textile venture setup in Nagpur
1892 : Jamsetji Tata estbd. the JN Tata Endowment. It was the
first of a multitude of philanthropic initiatives by the Tata group
1903 : Taj Mahal Hotel, Mumbai. Costed 4 crores at that time,
Was first building to be lit by electricity. During world war 1 it
was converted to a 600 bed hospital. Taj had Mumbais first ever
license bar
1904 : Death of Jamsetji Nusserwanji Tata, the chairmanship of
the Tata group passed to the elder of his two sons, Sir Dorab Tata
1907 : Sir Dorab Tata estd the first private steel company, 7
years later the first steel plant was estd in Jamshedpur.
1911 : Tatas established the IISC Bangalore
1912 : Tatas started the 8 hour work schedule in steel plants
and also started TATA provident fund
By the time of Sir Dorab Tatas death in 1932, the Tata
group had consolidated in businesses
Entered in new areas, notably insurance and the
production of soaps, detergents and cooking oil.
Sir Dorab was succeeded as chairman of the Group by Sir
Nowroji Saklatwala.
In 1938, following Sir Nowrojis demise, 34-year-old JRD
Tata (left) was appointed as the new chairman.
JRD Tata led the group for the next 53 years
1932, Tata Aviation Service, the forerunner to Tata Airlines
and Air India, Indias national carrier, took to the skies.
From 13 companies (1938) JRD expanded portfolio to 300
in 1991 ( subsidiary and associate companies included)
Tata Group : Consolidation
0 0 0 0
1 2 3 4
Ratan Tata took over Some companies were Through 1990s costs Group developed
the reins in 1991 as divested others were as well as employee brand equity scheme
the chairman organized around ranks were cut and Under this group
Prioritized improving seven sectors quality of products & companies were
the competitiveness & Information system, services were required to pay for the
streamlining the engineering, upgraded. use of Tata brand
operating companies, materials, chemicals, Group worked to make Sought to increase
revamped the groups consumer products, each of its businesses Tata Sons stake in
struggling steel and Energy & Services economic value add group companies from
motor companies positive minority to 26% to
prevent any hostile
takeover
Tata Group : Consolidation (Contd)
0 0 0 0
5 6 7 8
Centralized This structure was Aggregate Market value Indias largest private
management put in place to better 1996 : $8.2 billion sector employer.
organization was coordinate strategy 2007 : $60 billion Revenues $28.8
created to help and leverage its In 2007, Tata group had billion in 06-07. 6
oversee operating combined financial 96 operating companies largest operating
companies. strength and Sectors : Steel, IT companies: Tata
1. Group executive reputation. consulting, hotels, motors, Tata Steel,
office This was essential to automobiles, TCS, Tata Power,
face a more communication, Tea, Telecom provider
2. Group corporate Watches, Chemicals VSNL, Tata chemicals
center competitive business
environment accounted for 77.6%
Both the groups of groups collective
consisted of revenues
longstanding
Economic Setting in India
Mid 1991 India on the brink of defaulting
on its international obligations
Foreign currency Assets - $975 million
Investmen
In 2000, Forex Regulatory Act was replaced by much liberal Forex
management Act
ts
This piqued the interest in securities like FCCBs, ADRs and GDRd
Indian
being issued by
the Indian Companies
Private external flows to Indian Companies shooted from $2.2 billion
in 2000 to
$19.3 billion in 2005
In 2006, M&A deals across the globe amounted to $3.8 trillion
Tata Consultancy Services
Beginning in 2001, TCS used M&A in India
and overseas to make additions to its
technological capabilities
TCS the groups information technology (IT)
giant was growing at a faster pace than
other TATA group of companies
As there was a limited demand for IT
services in India
It exported IT services to North America and
Europe
It opened delivery centers in India, Australia,
Brazil, China, Hungary, Japan, Mexico and
Uruguay and employed 89000 employees
By 2006-07, 91% revenues were derived
from outside India and TCS accounted for
$27.8 billion of Tata groups collective
capitalization of $59.5 billion
Acquisitions made by Tata Consultancy
Services
Date Tata Company Acquired Company Country
Nov 2001 TCS Computer Maintenance Corporation India
Jan 2004 TCS Airline Financial Support Services India
Mar 2004 TCS Aviation software Development India
Jul 2004 TCS Phoenix Global Solutions India
Oct 2005 TCS Financial Network Services Australia
Oct 2005 TCS Pearl Group UK
Oct 2005 TCS Comicrom Chile
Feb 2006 TCS Tata Infotech India
Oct 2006 TCS TKS- Tecknosoft Switzerland
Nov 2006 TCS Total Communication Solutions Australia
Titan
Indias leading watch brand
Incurred insignificant losses when entered in
European market in 1990s
It found more success when it entered Middle East
Reason for success: Significant population of NRI
in such places
Titan has no real history of acquisition until
recently it acquired majority stake at CaretLane
It has Joint Venture with Timex between 1992 to
1998
It also has presence in Jewelry [Tanishq], Helmet
[Fastrack] and fragrance, wallet and eye wear
Indian Hotels Company (IHC)
IHC parent of the groups hospitality businesses
including Taj Hotels, was among the earliest
group companies to begin globalizing its
business
In 1982, IHC purchased two properties in London.
After incurring losses in 1990s, sold minority
stakes to two strategic partners in 2001
IHC divested owned properties in New York,
Chicago and Washington, D.C in late 1990s
IHCs strategy for globalization shifted to
presence in Gateway cities through
management contracts with small equity
positions in properties instead of ownership to
build seamless connectivity to potential global
customers
In this way they could build a chain though
owning very few hotels
Acquisitions made by Indian Hotels Company
(IHC)
Date Tata Company Acquired Company Country
Sep IHC Regent Hotel India
2002
Jul 2005 IHC The pierre (on lease) US
Dec IHC W hotel Australia
2005
Jan IHC Ritz-carlton-Boston US
2007
Apr IHC Hotel Campton place US
Tot al
2007 Re ve nue (in M illion ) Return Ratios
18.0%
Jul 2007 IHC Innovative
26,011.3 foods
16.0%
India
14.0%
18,747.3 12.0%
10.0%
13,379.4 8.0%
10,397.6 6.0%
8,917.4
4.0%
2.0%
0.0%
2004 2005 2006 2007
Provided additional financial support from the Tata Sons, whenever a particular
acquisition is identified as beneficiary to both the firm
Major group acquisitions were structured in order to ensure the groups holding in the
acquiring operating company increased as the result of the acquisition.
Integration Committees were set up post acquisitions to help combine the entities and
realize synergies. But the decentralized nature of Tata Group limited this rapid adoption
of common
Project Prune practices.
Year Savings
Tension between central initiatives and local management 2003-04 $3 Million
came into notice, which resulted in commencing a cost saving
2004-05 $10 Million
initiative- Project Prune.
Established in 2003-04 to look at procurement costs across 2005-06 $32 Million
group companies and negotiate with providers as a group to 2006-07 $20 Million
apply the best deals to all Tata companies.
The Project fetched the group easy savings which were not
thought of before.
TATA MOTORS
Joint-
JV with
Venture
21% stake Thonburi Technical
with JV with Fiat
in Spanish Automotive centre in
Marcopolo to produce
bus-maker Assembly U.K. to
in Brazil for Passenger
Hispano plant for contribute
worlds cars and
Carrocera Pick up product
largest Bus parts in
in 2005 Trucks in developmen
Manufactu India
Thailand, t
ring
2006
Facility
BENEFITS RISKS
Jaguar is a loss-making brand
Jaguar and Land Rover would bring The deal value for Jaguar and Land Rover is
Well-known global brands
expected to be priced at $1 billion to $2 billion,
New technology
which a significant addition to the companys
Advanced market distribution channels
existing capital expenditure plans ($2.98 billion)
Long-term profitability
Short term cash outflow may lead to high
Portfolio extension
debt/equity levels(94.6%)
Poor operating profitability of the takeover targets
could lead to very long payback periods
Toward a Truly Global Tata Group
The rapid transformation of a Tata group from one country to highly global
organization presented significant management challenges to Tata group
The group would have to carefully balance financial risks of leveraged transactions
with :
o Expansion opportunities
o Weigh domestic versus international opportunities
o Realize synergies in acquisitions
Apart from strategic and financial challenges ,corporate culture of group companies
will be affected by globalization
Acquiring Jaguar and Land Rover ,Tata group sought to square its origins,
organizations, and capabilities with its global ambitions