Scribd
Upload
20 views10 pages

Acquisition of Jaguar and Land Rover by Tata Motors: by Rohan Sahoo MM2123368 Bimm MKT A

Tata Motors acquired Jaguar and Land Rover from Ford in 2007 for $2.3 billion. Ford was selling the brands as part of a restructuring to focus on its core brands. Tata Motors was interested in the acquisition to diversify its business across markets and products and enter the luxury automotive segment. However, Tata Motors faced problems following the acquisition due to cash flow issues and a shortage of working capital that impacted its ability to repay acquisition loans. While the acquisition transformed Tata Motors into a global player and provided access to new technology and markets, it also exposed the company to financial strain in the early years.

Uploaded by

Roushni Parveen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
20 views10 pages

Acquisition of Jaguar and Land Rover by Tata Motors: by Rohan Sahoo MM2123368 Bimm MKT A

Tata Motors acquired Jaguar and Land Rover from Ford in 2007 for $2.3 billion. Ford was selling the brands as part of a restructuring to focus on its core brands. Tata Motors was interested in the acquisition to diversify its business across markets and products and enter the luxury automotive segment. However, Tata Motors faced problems following the acquisition due to cash flow issues and a shortage of working capital that impacted its ability to repay acquisition loans. While the acquisition transformed Tata Motors into a global player and provided access to new technology and markets, it also exposed the company to financial strain in the early years.

Uploaded by

Roushni Parveen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

Acquisition of

Jaguar and Land


Rover by Tata
Motors

By
Rohan Sahoo
MM2123368
BIMM MKT A
Contents
• Introduction
• Why was Ford selling JLR
• Why was Tata Motors interested in buying
JLR
• Problems faced by Tata Motors post
acquisition
• Did Tata Motors benefit from the acquisition
• Pestle Analysis
Introduction
Why did Ford Sell Jaguar and land Rover ?
• Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000.
• Ford sold Jaguar and Land Rover as part of its restructuring efforts to focus on its core brands
(Ford, Lincoln, and Mercury) and improve its financial position.
• Ford was facing declining sales and profits, and it needed to reduce its debt load and free up
resources to invest in its core business of producing and selling mass-market cars and trucks.
• In 2007, Ford Motor Company sold its luxury Jaguar and Land Rover brands to Tata Motors, for
$2.3 billion.
Why was Tata Motors interested in
buying Jaguar land Rover ?
• Increase business diversity across markets and products

• Enter high end premier segment of global automobile industry

• Gain access to world class engineering capability


Competitors now Tata Motors would face
BMW
MERCEDES
AUDI
LEXUS
VOLVO
Problems faced by Tata Motors after Merger
• Tata Motors began to experience a number of issues with cash flow and had a negative working capital
situation.
• A shortage of working capital had put them in a bind when it came to repaying the 3 billion USD bridging loan
that had been taken out to pay for the acquisition of Jaguar and Land Rover the corporation was only able to
return 1 billion USD of the bridge loan at the end of 2008, even though it was originally due in June 2009,
makes it clear that the company is having serious problems in its post-acquisition period.
• The industry also experience that the export declined by 38.6% during the year 2009 due to a serious
meltdown in the major International markets
Did Tata Motors benefit from the
acquisition
• Tata Motors was transformed into a global player in the automotive industry
• Product portfolio was diversified
• Tata Motors gained access to advanced automotive technology and engineering expertise.
It was able to leverage this expertise and incorporate it into its own products.
• Tata Motors gained access to a global distribution network and established markets in
Europe, North America, and other regions
• With the addition of JLR, Tata Motors' revenues increased significantly, and the company
was able to generate profits from its luxury car and SUV segments
PESTLE Analysis of JLR
Political Economical
• Ukraine- Russia war has affected global businesses • Central banks are raising interest rates to tackle
• China has withdrawn its zero covid policy inflation
• The golden era for UK and China relations is over • Supply chain crisis has caused chip shortages
Social Technological
• With rise in disposable income the demand for • Automobiles are becoming more connected
luxury cars will grow in Asia in the coming years through new technologies
• Autonomous vehicles are going to dominate the
future
Legal Environmental
• EU commission has proposed new Euro 7 • Automobile companies are moving towards electric
Standards vehicles for sustainable future
• EU has approved effective ban on fossil fuel cars by • Global companies are aiming to become carbon
2035 neutral
Thank You

You might also like