Tata The Company’s all other operations segment mainly

Tata Motors Limited is India’s largest Automobile
Company established in 1945. And headquartered in Mumbai, it was formerly known
as TELCO. Furthermore, the parent company is Tata Group. The mission of the
company is we innovate mobility solutions with passion to enhance quality of
life. The values of the company included integrity, teamwork, accountability,
customer focus, excellence and speed. The Company is involved in manufacture of
motor vehicles. The Company is involved mainly in the business of automobile
products containing of all types of commercial and passenger vehicles,
including financing of the vehicles sold by the Company. The segments of the
company include automotive operations and all other operations. The Company’s
automotive segment operations include all activities relating to the
development, design, manufacture, assembly and sale of vehicles, including
vehicle financing, as well as sale of related parts and accessories. In the
automotive segment, the Company manufactures and sells passenger cars, utility
vehicles, light commercial vehicles, and medium and heavy commercial vehicles.
The Company’s all other operations segment mainly includes information
technology (IT) services, and machine tools and factory automation services.

In addition, Tata Motors have assembly plants and auto
manufacturing units in different cities of India, including Sanand, Lucknow,
Pantnagar, Jamshedpur, Pune and Dharwad. They have facilities in Thailand, UK,
South Africa and so on. The company has joint venture with Marcopolo for
manufacturing buses. The design and research & development centre of the
company located in India, the UK, Italy and Korea strive to innovate new
products that achieve performances that will fire the imagination of GenNext
customers

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Nowadays, The Company operates in over 160 countries
across the world. And they are more than 60000 employees work in the company (Tata Motors,
2018).

Jaguar Land Rover (JLR) is the UK’s largest automotive
manufacturing business, and it built around two iconic British car brands: Land
Rover, the world’s leading premium all-terrain vehicle and Jaguar, one of the world’s
premier luxury sports cars. After Tata Motors acquired Jaguar and Land Rover
from Ford in 2008, it merged the two marques into a single company and its
success has flourished, with memorable vehicles and innovative technologies
that add to a long-lasting legacy.

The origins of Jaguar can be traced back to a company
that began by making motorcycle sidecars in 1922. The Swallow Sidecar Company
later started building automobiles and moved to Coventry, switching its name to
Jaguar after the Second World War. It produced premium saloons and sports cars,
including the legendary XK120.

Around this time, Rover started to develop a new
all-terrain vehicle, inspired by the American Jeep. Lightweight and rustproof,
the first Land Rover was clad in aluminium alloy, due to the post-war steel
shortage, and cost £450. It introduced 4×4 capabilities to road cars and was
soon adopted by the military as well.

So popular was the new car that British Leyland made
Land Rover a standalone company in 1978. Very little about the first Range
Rover was altered over the years – 1981 introduced a four-door, while a diesel
arrived in 1986. As the Range Rover became seen as more upmarket, the Land
Rover Discovery was launched in 1988 as a third model in the range.

After splitting from British Leyland, Jaguar became
independent again in the 1980s, before being purchased by Ford in 1989. Land
Rover, meanwhile, was bought by BMW in 1994, which expanded the range further
by introducing the Freelander. It then joined Jaguar under Ford in 2000, with
the two companies becoming closely linked, sharing engineering knowledge and
facilities (JAGUAR LAND ROVER LIMITED, 2016).

In 2008, the two were bought by Tata Motors, India’s
largest automobile manufacturer, and officially joined together as one company
in 2013. Sales and profits have risen year on year, with more exciting chapters
in the histories of these two brands still to be written (Tata Sons
Ltd, 2018).

 

Question
2

In March 2008, Ford sells Jaguar and Land Rover (JLR)
to Tata Motor around 10billion pound. And it happened a few months before a
collapse in global demand in the international car market. Furthermore, Tata
Motors financed the takeover with $3billion of a new long-term loan. Then, the
price that paid by Tata Motor was approximately half of the Ford paid to buy
Jaguar and land Rover. Ford had continued to incur heavy losses in Jaguar
Because it hard to turn the business and make it successful.

This deal took over a year to agree by both side and
it may have helped with the post-merger integration. Tata realized that it
would continue to need the support for the Ford. This is because Ford is the
main supplier of car components of these two brands, which are Jaguar and Land
Rover.

In addition, Tata Motor did not make a lot changes in
the business. They claimed that staff, trade unions and the UK government had
been kept informed about the proposed takeover and supported the move.

Finally, this deal has been endorsed by the trade
unions, which secured a commitment from Tata Motors to continue with JLR’s
production plans until the end of 2011. In the same time, this included the
development of the new models of the products (Riley, 2012).

The motives of mergers and acquisition is acquiring
JLR would provide significant potential for revenue synergies and including
giving Tata Motors a greater international distribution, broader product range
and better customer service skills. This is because JLR is came from luxury
products, the customers are different with the Tata Motors. In addition, JLR is
famous around the world of the brands. They are having different customer
service skills with others brand. So, this is unique way of the JLR.

Next is Tata Motors gains access the world-class
engineering capability. This is because Tata Motors acquired JLR, so they can
access the engineering and involved in the research and development centre. In
the same time, Tata Motors can use of the JLR’s technical to development new
model of the vehicles. This will be a benefit for Tata Motor acquire JLR (Chandran,
2008).

Third is strengthens relationship between Tata Motor’
steel and motoring business. JLR is the luxury and famous brand around the
world. So, this can lead Tata Motors to become more successful in the world.

Besides, acquisition would help the company to enter
into the higher premier segment of the global automobile market. As mentioned
by the last point, JLR is a brand and it famous around the world. In this
acquisition will help Tata Motors enter the higher premier market and let more
people know about the Tata Motors.

JLR had two advance design studios and latest
technology as a part of the deal. This would provide Tata Motors access to the
latest technology which will also allow Tata Motor to improve their core
products in India (Laddha, 2016).

For a long term, Tata Motors can get more benefits
from the JLR after acquired JLR. This is the win-win situation for the both side.

There are some examples of motive of mergers and
acquisition. First are the tax benefits. Mergers are also adopted to reduce the
tax liabilities. When merging with a loss-making entity, the company with a
high tax liability cans et off the accumulated loses of the target against its
profits, gaining tax benefits. A good example for the tax benefits is Ashok
Leyland Information Technology (ALIT). ALIT was acquired by the Hinduja
Finance, a group company, so that it could set off the accumulated loses in ALIT’s
books against its profits.

Second is access to funds, this is because often a
company find it difficult to access funds from the capital market. This
deprives the company of funds to reward its grow objectives effectively.
Examples of access to funds is TDPL, TDPL merged with Sun Pharma since TDPL did
not have finds to launch the new products.

Entry into new markets also one of the motive in
merger and acquisition. Mergers are often looked upon as a tool for hassles
entry into new markets. Under normal conditions, a company can enter a new, but
may have to face inflexible competition from the existing market. In the same
time, entry a new market also a big challenge of the company (NGUYEN, et
al., 2012).

 

 

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