House of Tata

9-708-446

REV: JUNE 30, 2009

TARUN KHANNA KRISHNA G. PALEPU RICHARD J. BULLOCK

House of Tata: Acquiring a Global Footprint

I think risk is a necessary part of business philosophy. I view risk as an ability to be where no one has been before. I view risk to be an issue of thinking big, something we did not do previously. We did everything in small increments so we always lagged behind. Ratan Tata, Chairman, Tata Group1 In August 2007, the Tata Group, one of India’s largest business houses, was reported to be weighing another big global acquisition bid. Just six months after Group company Tata Steel clinched its $12.1 billion acquisition of U.K.-based Corus—the largest overseas acquisition in Indian history— Tata Motors contemplated bidding for Land Rover and Jaguar, two iconic British automotive brands owned by struggling U.S.-based automaker Ford Motor Company. For Ratan Tata, chairman of the Tata Group, cars had been an abiding passion, from his personal car collection to his personal contributions, to the design of some Tata Motors models. Yet the possibility of acquiring Jaguar and Land Rover presented many questions for him and the Tata Group leadership. The acquisitions would give Tata Motors access to new technology and markets, but taking over two Western luxury car brands might be a stretch for a company that had traditionally focused on commercial trucks and passenger cars primarily catering to middle-class consumers in India. Tata Motors had made international acquisitions in the past, but never before on this scale—and none requiring such a financial turnaround as loss-making Jaguar. Jaguar and Land Rover had a number of rumored suitors. According to media reports, several private equity firms and Tata Motors’ Indian rival Mahindra & Mahindra were also considering bids for the two brands. The Tata Group was mindful of the challenges a bidding war would present. Tata Steel secured the Corus acquisition only after a tense auction with Brazilian...