Global Business Environment

Assignment -3

Submitted to- Submitted by-

Prof. Vivek Dabral Singh Arvind Kumar Patel
Course- PGDM-GLOBAL
ERP ID- 0191PGM108

ASSIGNMENT – 3
“Submit a report after studying Indian Companies and their International
Strategic Alliances over the period of last 15 years.”

……………………………………………………………………………………….

Company :- Tata Motors Acquisition :- Daewoo, Korea

• Price (in $ millions) :- 118

• vital stats about alliance :-

Tata Motors $102m takeover became the largest Indian acquisition in Korea. The 265bn won
($250m) DWCV clocked an operating profit of 16.5bn won and a net profit of 6.6bn won ($6m)
in the year ended December ’03. It intends on using a three-pronged strategy in its new
avatar, to improve capacity utilisation and grab a greater market share.

• Synergies generated :-

Ravi Kant, executive director, commercial vehicles, Tata Motors, said the launch of upgraded
products in the pipeline, increased international sales through the Tata network and the
introduction of new products in the medium term, will collectively improve DWCV market share
in Korea and overseas. The company enjoys a 25% share of the heavy truck market in Korea.

The new product development and capital expenditure will primarily be financed by
DWCV itself. Praveen Kadle, executive director, finance, Tata Motors, said, Our
objective is to grow revenue and profitability in DWCV and use these resources for
product development and growth. If despite that, the company needs fresh infusion from
Tata Motors, we will do so. But the top team has yet to decide on the integration of
capex and product development expenses between DWCV and Tata Motors, Mr Kadle
said.Thanks to the acquisition, Tata Motors will have heavy vehicles and will be able to
add medium and small vehicles to DWCV, Mr Tata said.
Tata Motors is looking to capitalise on the complimentarity between its range and that of
DWCV.
  Current Situation :-

DWCV CEO Chae Kyong Ok suggested that the Tatas may want to continue using the Daewoo
brand since they gave such high value to it, while Mr Kant added that for now, the Daewoo
brand would continue both in Korea and overseas. Coordination between the two companies
would be handled by a small team, he said.
When quizzed by the local media about the possibility of Tata Motors passenger vehicles coming
into Korea, Mr Tata said, Anything is possible. Although it was too premature of talk of Indicas
and Indigos in the Korean market, he said, there was a market for Tata Motors cars in Korea, we
would like to assemble them locally with part shipments from India, instead of simply importing
them.

• Company :- Infosys Technologies

Acquisition :- Expert Information Services, Australia
• Price (in $ millions) :- 3.1

• vital stats about alliance :-

Total revenues of A$ 46.7 million (US$ 34.6 million*) for the fiscal year ended June 30, 2003
and a net profit after tax of A$ 7.0 million (US$ 5.2 million). The transaction value would be
approximately A$ 31.0 million (US$ 22.9 million) and would comprise payment in cash on
completion of the transaction and earn-out on achieving targeted financial conditions over a
three-year period ending March 31, 2007.

• Synergies generated :-

Expert is one of Australia's leading IT service providers specializing in the design, build and
integration of business solutions and products to leading companies in Australia. Its clients
include medium and large enterprises, which span across various industry verticals such as
Telecom, Financial services, Retail, and Government sector.

• Current Situation :-

"The merger with Infosys is a perfect fit with Expert's business strategy and we are very excited
about it," said Mr. Gary Ebeyan, Chief Executive Officer, Expert. "The new entity will allow us
to continue to deliver high-quality, leading edge solutions to our existing and new customers with
an extraordinary value proposition based on the Global Delivery Model of Infosys."

• Company :- Reliance Industries Acquisition :- Trevira,

Germany
• Price (in $ millions) :- 95

• vital stats about alliance :-

Reliance Industries is set to acquire German polyester company Trevira for €80 million (about
Rs 443 crore at the current conversion rate), Chairman and Managing Director Mukesh Ambani
told shareholders at the company's annual general meeting here yesterday. Ambani also
announced a plan to add 1 million tonnes of polyester capacity over the next two years. After the
completion of the Trevira deal and the expansion, Reliance's capacity for producing polyester
fibre and yarn would exceed 1.8 million tonnes, making it the largest player in the world,
Ambani said. Reliance now has an installed capacity of 1.1 million tonnes and Trevira 130,000
tonnes. "I am delighted to announce that Reliance has finalised the acquisition of Trevira GmbH,
an erstwhile division of German giant Hoechst AG, a leading polyester producer and a
wellknown brand in Europe," Ambani said. The deal marks the second overseas acquisition in
the last few months by India's largest industrial house. In January this year Reliance Infocomm
acquired US-based FLAG Telecom for $311 million. The Trevira acquisition not only gives
Reliance an entry into Europe but also a chance to capture the Eastern European market. The
Trevira deal comes a year before the World Trade Organisation dismantles textile trade quotas,
which is expected to open up new markets for the world textile industry.

• Synergies generated :-
The global economic downturn has hit India's most valued company Reliance Industries, forcing
it to today declare as insolvent its German unit Trevira, a specialty polyester manufacturer.
"Trevira filed an application with the Augsburg Court in State of Bavaria, Germany, for the
commencement of insolvency proceedings with a restructuring plan," RIL said in a press
statement Trevira, which was part of German industrial conglomerate Hoechst AG before being
acquired by Reliance, manufactures high-value branded polyester fibers and filament yarns for
the automotive industries, home textiles as well as for technical applications. The filing for
insolvency follows attempts by the company to overcome the impact of industrial slowdown in
Europe, particularly of the automotive and textile sectors to which it is an important supplier.

• Current Situation :-

The Trevira acquisition not only gives Reliance an entry into Europe but also a chance to capture
the Eastern European market. The Trevira deal comes a year before the World Trade
Organisation dismantles textile trade quotas, which is expected to open up new markets for the
world textile industry.
 • Company :- Wipro Acquisition
:- Nerve Wire Inc, US
• Price (in $ millions) :- 18.5

• vital stats about alliance :-

Wipro Limited (NYSE: WIT) announced today that it entered into a definitive agreement to
acquire NerveWire, Inc., a Newton, Massachusetts based Business and IT Consulting company
serving financial services clients, for approximately $18.7 million in cash, subject to adjustments.
Wipro expects the transaction to be completed in the quarter ending June 2003.

• Synergies generated :-

In the Indian market, Wipro is a leader in providing IT solutions and services for the corporate
segment in India offering system integration, network integration, software solutions and IT
services. In the Asia Pacific and Middle East markets, Wipro provides IT solutions and services
for global corporations. Wipro also has profitable presence in niche market segments of
consumer products and lighting.

• Current Situation :-

The risks and uncertainties relating to these statements include, but are not limited to, risks and
uncertainties regarding our ability to integrate and manage acquired IT professionals, our ability
to integrate acquired assets in a cost effective and timely manner, fluctuations in earnings, our
ability to manage growth, intense competition in IT services including those factors which may
affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled
professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client
concentration, restrictions on immigration, our ability to manage our international operations,
reduced demand for technology in our key focus areas, disruptions in telecommunication
networks, , liability for damages on our service contracts, the success of the companies in which
Wipro has made strategic investments, withdrawal of fiscal governmental incentives, political
instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized
use of our intellectual property and general economic conditions affecting our industry.