British Motor Holdings

The Tata group comprises over 100 operating companies in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. J.R.D.Tata founded the Tata Motors Limited (formerly TELCO) company in 1945 as a manufacturer of locomotives.

The company headquartered in Mumbai, Maharashtra, India is a subsidiary of the Tata Group. It is India’s largest automobile company, with consolidated revenues of INR 1,65,654 crores (USD 32.5 billion) in 2011-12. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. It is the world’s fourth largest truck and bus manufacturer. Its products include passenger cars, trucks, vans, coaches, buses and military vehicles.

The company manufactured its first commercial vehicle in 1954. It entered the passenger vehicle market in 1991 with the launch of the Tata Sierra and in 1998 launched the first fully indigenous Indian passenger car, the Indica. The company’s manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and Dharwad (Karnataka).. The company through subsidiaries and alliances has operations in UK, South Korea, Thailand, Spain and South Africa.

The company is listed in the Bombay Stock Exchange where it is a constituent of the BSE SENSEX index, the National Stock Exchange of India and the New York Stock Exchange. It is also the first company from India’s Engineering Sector to be listed in the New York Stock Exchange (September 2004).

The company is ranked 314th in the 2012 Fortune Global 500 ranking of the world’s biggest corporations and the reason behind this is the company’s over 55,000 employees who are guided by the vision to be ”best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics.”

JAGUAR

Jaguar was founded as the Swallow Sidecar Company by Sir William Lyons in 1922, originally making motorcycle sidecars before developing passenger cars. It is a British luxury and sports car manufacturer, headquartered in Whitley, Coventry, England. It is part of the Jaguar Land Rover business In 1935 the SS Jaguar name first appeared on a 2.5-litre saloon, sports models of which were the SS 90 and SS 100. Jaguar was listed on the London Stock Exchange in 1984, and became a constituent of the FTSE 100 Index until it was acquired by Ford in 1990.

The Swallow Sidecar company (SSC) was originally located in Blackpool but moved to Holbrook Lane, Coventry in 1928 when demand for the Austin Swallow became too great for the factory’s capacity. In 1951, having outgrown the original Coventry site they moved to Browns Lane, which had been wartime “shadow factory” run by the Daimler Motor Company.

Today, Jaguars are assembled at Castle Bromwich in Birmingham and Halewood in Liverpool. Jaguar made its name by producing a series of eye-catching sports cars, such as the XK 120 of 1949, developed into XK 140 and XK 150, and the E Type (or XKE in the US) of 1961.

These were all successful and embodied Lyons’ mantra of “value for money”. They were successful in international motorsport, a path followed in the 1950s to prove the engineering integrity of the company’s products. Jaguar’s sales slogan for years was “Grace, Space, Pace”, a mantra epitomised by the record sales achieved by the MK VII, IX, Mks I and II saloons and later the XJ6. Jaguar merged with the British Motor Corporation (BMC), the Austin-Morris combine, to form British Motor Holdings (BMH) in 1966.

After merging with Leyland, which had already taken over Rover and Standard Triumph, the resultant company then became the British Leyland Motor Corporation (BLMC) in 1968. Financial difficulties and the publication of the Ryder Report led to effective nationalization in 1975 and the company became British Leyland, Ltd.

Ford made offers to Jaguar’s US and UK shareholders to buy their shares in November 1989; Jaguar’s listing on the London Stock Exchange was removed on 28 February 1990. In 1999 it became part of Ford’s new Premier Automotive Group along with Aston Martin, Volvo Cars and, from 2000, Land Rover.

Aston Martin was subsequently sold off in 2007. Under Ford’s ownership Jaguar expanded its range of products with the launch of the S-Type in 1999 and X-type in 2001. Since Land Rover’s May 2000 purchase by Ford, it has been closely associated with Jaguar. In many countries they share a common sales and distribution network (including shared dealerships), and some models now share components. However operationally the two companies were effectively integrated under a common management structure within Ford’s PAG.

International Acquisitions

Acquisitions that take place beyond boundaries of a particular country are known as international acquisition. They are also termed as global acquisitions or cross-border acquisitions. They are performed to obtain some strategic benefits in the market of a particular country. The multinational companies enjoy a number of advantages like economies of scale and market dominance with the help of international acquisitions. It plays an important role behind the growth of a company and also stimulates foreign direct investment (FDI).

TATA Motors acquisition of JAGUAR.

On 12.06.2007 Ford had announced its plans of selling Jaguar and Land Rover. In august’07 TATA Motors, M&M, Ceribrus Capital Management, TPG Capital and Apollo Management were identified as the major bidders. TATA Motors ($2.05b) and M&M ($1.95b) arrived as the top bidders and Ford announced TATA Motors as the preferred bidders on 03.01.2008. Ford agreed to sell their JAGUAR and Land Rover (JLR) operations to TATA Motors on 26.03.2008 and on 02.06.2008 the acquisition was completed.

The deal included the purchase of JLR’s manufacturing plants, two advanced design centers in the United Kingdom, national sales companies spanning across the world and also licenses of all necessary intellectual property rights.

Financing Strategy

TATA Motors raised $3 billion though bridge loans for 15 months from a cluth of banks, uncluding J.P.morgan, Citigroup, and State Bank of India. The credit rating companies also took a negative outlook towards this deal because if the huge debt requirement to complete the deal.

Ford selling JAGUAR, Why ?

In 1990, after ford acquired Jaguar, there were adverse economic conditions and this led to tough market conditions and decline in the demand for luxury cars. The sales of Jaguar in many markets went down but in countries like Japan, Germany and Italy it had high sales. In 1999 Ford established the PAG with Astin Martin, Jaguar, and Lincoln. During that year, Volvo was acquired for US$ 6.45 billion, and it also became a part of the PAG.