Case ID 17-1039
Published 2017
Industry MOTOR VEHICLES, PARTS AND ACCESSORIES
Industry Code 311
Subject General management


Abstract Ford, a British automobile firm owned Jaguar & Land Rover, the two premium brands which were later acquired by an Indian car maker Tata Motors for $2.3 billion in the year 2008. The automotive industry in the past, have seen several mergers & acquisition. But, few unique facts made this acquisition an interesting one. One of the facts that Tata a low-cost car manufacturer succeeded in managing a premium brand like JLR, while Ford who are huge in terms of experience and size in the industry, failed to meet the expectation. At that time (early 2008), this acquisition seemed to be a poorly timed and experts were questioning the strategic logic of the move and its timing. Following this, right after the takeover, in the global market the demand for luxury cars collapsed due to the financial meltdown and Tata was compelled to re-finance to support its investment. But to everyone’s surprise , profit and sales of JLR reached a tremendous growth post acquisition. Financial experts, in 2014 assessed that the valuation of the premium brand JLR elevated from $2.3 billion to $14 billion in 5 years. Even after several years, the deal appears to be an example of a triumphant Acquisition, which is generating profitable shareholder value for Tata and also obtaining continued support from JLR’s stakeholder groups in the UK. This acquisition is an image of this new globalization. Even though, the manufacturers in developing countries do not have the expertise to create competitive products for Europe and US markets, thanks to their market and strong financial power by which they can acquire and develop their range and business all around the globe. This business case aims to identify the various drivers behind this success story by analyzing the post-acquisition strategies adopted by both Ford and Tata.
Pages 25
Teaching Note Yes