1. WELCOME TO PRESENTATION OF MERGER AND AQUICISION

2. Merger
Merger is define as combination of two or more companies into a single company where as one survives and other losses its their corporate existence. The surviving company acquires all the assets as well as liabilities of the merged companies. Generally , surviving company is the Buyer.

3. Acquisition
Acquisition is general sense is acquiring the ownership in the property.
An Acquisition is the purchase by one company of a controlling interest in the share capital of another existing company.
When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition.
Acquisition is generally considered negative in nature

4. WHAT IS MERGER & ACQUISITION ?

7. Takeovers
A corporate action where an acquiring company makes a bid for an acquiree . If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.

8. Takeover might be : Friendly Takeover
Hostile Takeover A takeover attempt that is strongly resisted by the target firm
Friendly Takeover
Target company's management and board of directors agree to a merger or acquisition by another company.

10. SYNERGIES RELATED TO ACQUISITION
Staff reductions
Acquiring new technology
Improved market reach and industry visibility

11. WHY SHOULD FIRMS TAKEOVER?
To gain opportunities of market growth more quickly.
To seek to gain a more dominant position in a national or global market
To acquire the skills or strengths of another firm.
To acquire a speedy access to revenue
To diversify its product or service range to protect itself against downturns in its core markets

12. Major M&A Deals Undertaken Abroad by India Inc.
USD 12.1 billion
Tata Steel buys Corus Plc
USD 6 billion
Hindalco acquired Novelis Inc.
Tata buys Jaguar and Land Rover
USD 2.3 billion
USD 1.58 billion
Essar Steel acquired Algoma Steel
USD 1.6 billion
Suzlon Energy Ltd. acquires REpower

13. TATA MOTORS, JAGUAR & LAND ROVER OVERVIEW

14. OVERVIEW OF TATA AND FORD MOTORS
Jamsetji Nusserwanji Tata
Henry Ford

16. TATA MOTORS OVERVIEW
TATA GROUP is 150 year old, Previously Tata Engineering and Locomotive Company, Telco.
India's largest passenger automobile and commercial vehicle.
Tata Motors was established in 1945
Listed on the New York Stock Exchange in 2004.
It is the 5th largest medium and heavy commercial vehicle manufacturer in the world. listed in BSE, NSE & NYSE.
Subsidiaries-
JAGUAR CARS
LAND ROVER
TATA DAEWOO COMMERCIAL

18. JAGUAR OVERVIEW
JLR was a part of Ford's Premier Automotive Group (PAG) and were considered to be British icons.
Jaguar was involved in the manufacture of high-end luxury cars
Jaguar Cars Ltd. ( better known simply as Jaguar) is an automaker from England,United Kingdom that manufactures luxury and executive motor car.
Sir William Lyons founded jaguar as the Swallow Sidecar Company in 1922, originally making motorcycle sidecars before switching to passenger cars.
The name was changed to Jaguar after the second world war due to the unfavorable connotations of the SS initials.

20. LAND ROVER OVERVIEW
British car manufacturer founded in 1948 as a marquee of the Rover Company.
Known for superior off-road and road performance
1976 – 1 million cars running on the road
In 1994 Rover Group is taken over by BMW
Sold to FORD MOTORS for $ 2.75 b in 2000.
Used by military for projects and expeditions, Safe but less reliable, Makeover in recent times
Land Rover manufactured high-end SUVs.

21. WHY IS FORD SELLING?

22. Reports said losses at Jaguar stood at USD 715 million in 2006.
Jaguar was not able to provide any profit for ford because of the high manufacturing costs provided in the United Kingdom.
Rover's profit, on the other hand, was driven by the record sale of 2.26 lakh vehicles, an 18% YoY growth in 2007.
Ford was combining both the brands since the products and manufacturing of vehicles for Land Rover and Jaguar was so intertwined.

23. THE DEAL PROCESS

24. 12 Jun 2007- Announcement from Ford that it plans to sell Land Rover and Jaguar.
Aug Major bidders are identified
Likely buyers: Tata Motors, M&M, Ceribrus capital Management, TPG Capital, Apollo Management
India’s Tata Motors and M&M arrive as top bidders ($ 2.3b & $ 1.9b)
03 Jan 2008 – Ford announces Tatas as the preferred bidders
26 Mar Ford agreed to sell their Jaguar Land Rover operations to Tata Motors.
02 Jun 2008 – The acquisition is complete

25. THE DEAL
100% stake in Jaguar & land Rover Business
TATA Motors has acquired the business & initially they will be operated independently of the partner.
3 Plants in UK
These are well invested plants
2 advanced design & engineering center
engineers engaged in testing ,prototype design & powertrain
Engineering , development & integration
26 National sales company
Both existing national sales companies of jaguar/land rover & also those that are carved out of current Ford operation
Intellectual property rights
This covers all key technologies to be transferred to JLR & perpetual royalty free license on technologies shared with Ford
Support from Ford Motor Credit
Ford Motor Credit will continue to support the sales of JLR for around next 12 months
Pension Contributed by Ford
Ford will contribute $ 600 mn of the Pension Fund

26. WHY TATA BUYING?

27. Tata wanted to make a global impact and it thinks that buying these brands at a lower rate now, will give better value later on.
This acquisition also eases the entry of Tata in European market which it has been eyeing for long.
Reduce the company dependence on the Indian market which accounted for 90% of its sales
Opportunity to spread its business across different customer segment
At the price staring from 63 lakh and going upto 93 lakh, it seems Tata has just got the right place to compete with the current market leaders in luxury brands – BMW, Audi, Mercedes
Publicity on an international scale
Access to large distribution network
JLR had many new models lined up for next 3 years, so no much work just profits
Strong R & D culture and facilities

28. POST MERGER

29. 'We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact,' – Ratan Tata

30. Cultural Factors
“Change of ownership has little to do with the changing of culture”
The essence of this method lay in respecting the existing culture rather than imposing a foreign culture. 
TATA, in contrast with Daimler, decided to leave the existing management structure intact There wasn’t any attempt to impose Indian managers on JLR. All the key personnel retained their positions.
TATA didn’t just leave the current managers on their own. TATA managed to motivate them through constantly challenging them and working with them.
 TATA managed to inspire trust in JLR. The fact that most of JLR’s personnel were left on their positions showed that TATA trusts JLR, and believed that it is capable of solving their problems
TATA kept an open-mind and never hesitated to listen to feedback from subordinates. TATA’s top level officials often make trips to their factories and dealerships outside India and collect feedback from local employees. These opinions are being used in the developing company’s strategy.

31. Following Cost Rationalization initiatives were taken to improve cash flows:
Single shifts and down time at all three UK assembly plants.
Supplier payment terms extended from 45 to 60 days in line with industry standard.
Receivables reduced by £133 million from 38 to 27 days.
Inventory reduced by £217m between June 2008 and March 2009 from 70 to 50 days .
Labor actions –
- Voluntary retirement to 600 employees.
- Agency staff reduced by 800.
-Offered leaves to 300 workers of Bromwhich and solihull plant.
-Additional 450 job cuts including 300 managers.
Agreement with Unions to implement pay freeze and longer working hours (equivalent to approximately 20% reduction in labor costs.)
Engineering and capital spending efficiencies.
Fixed marketing and selling costs reduced in line with sales volume.
Reduction in all other non-personnel related overhead costs.

34. CONCLUSION The merger seemed poorly timed then
Demand for luxury cars collapsed as a result of financial crisis
Refinancing from CITI group and JP MORGAN
Started making profits in 2010 upto 41 %
Now an example of a successful merger
Entered CHINA in march 2012 with a joint venture with Chery automobiles
Recent announcement for investment in Middle East