Assignment of Mergers and Acquisitions

(Companies involved are Tata Motors and Jaguar and Land Rover brands from Ford Motors)


Tata Motors acquired Jaguar and Land Rover brands from Ford Motor in March
2008. The deal amounted to $2.3 billion.

About Tata motors:
Tata Motors is India's largest automobile company, with revenues of Rs.
38,364 crores in 2009- 2010.

It is also the world's fifth largest medium and heavy truck manufacturer and the
second largest heavy bus manufacturer.

With over 4 million Tata vehicles plying in India, it is the leader in commercial
vehicles and the second largest in passenger vehicles.


Tata cars, buses and trucks are being marketed in several countries in Europe,
Africa, the Middle East, South Asia, South East Asia and South America.

About Ford:
The Ford Motor Company is an American multinational corporation based in
Dearborn, Michigan, a suburb of Detroit.

The automaker was founded by Henry Ford and incorporated on June 16, 1903.
Ford is currently the second largest automaker in the U.S. and the fourth-largest
in the world based on number of vehicles sold annually, directly behind
Volkswagen Group.

The form of restructuring it was an acquisition.

Now we will discuss the benefits of restructuring:

Financial benefits:
EBIDTA/ Interest remains at 5.0

Excluding the finance biz, leverage would go to 1.2 x.

P/E (1 yr forward) of 6.5x against 48.5 for global peers.


EV/Sales (1 yr forward) of 0.5x against 0.4x for global peers.

Leverage increases but coverage ratios reasonable: Debt/ Equity ratio of Tata
Motors would increase to 2.5x from 1x.


Overall Benefits:


Analysts were of the view that the acquisition of Jaguar and Land Rover, which had a
global presence and a repertoire of well established brands, would help Tata Motors
become one of the major players in the global automobile industry.

Tata Motors acquired JLR as it reduces the companys dependence on the Indian market,
which accounted for 90% of its sales.

The company viewed that the acquisition would provide it with the opportunity to
spread its business across different geographies and across different customer segments.


Long term strategic commitment to automotive sector.

Opportunity to participate in two fast auto growing segments.


Increased business diversity across markets and products.

Land Rovers provides a naturals fit for TMLS suv segment.


Jaguar offers a range of performance/ luxury vehicles to broaden the market
Portfolio.

Benefits from component sourcing, design services and low cost engineering.