Corporate Governance Issues and Stake Sale to Fund Acquisitions - TJLR Deal

Posted: 20 Sep 2009

See all articles by Padma Srinivasan

Padma Srinivasan

Manipal University, Bangalore Campus

Date Written: September 16, 2009

Abstract

Tata-Jaguar Land Rover deal was one of the most attractive acquisitions for the Indian automobile industry. The whole Tata-JLR deal is well planned and well executed move to globalize the Tata products and popularize both the premium and cost effective automotives of Tata Group. Tata motors were looking out for expansion of their automobile sector. Tata had already come up with the innovative idea of launching Tata Nano - the 1 lakh car and then they came out with the acquisition of the luxury brand of Jaguar and Land Rover leading into a strategic expansion in both lower and upper end market with global expansion. It is pertinent to look for backward and forward integration to facilitate cost effectiveness (not cost cutting) and take over international automobile space.

This research paper has looked at the financial and accounting aspect of this deal with support annexure. Looking at the automobile industry growth in India, this deal will provide an extended variety of cars for people of diverse needs. Stake sale for acquisition is not a common phenomenon in India since the promoters keep their stake to continue their control. So there were corporate governance and dimensions that were majorly discussed in this paper.

Keywords: Tata Group, Acquisitions, Brands, Backward and Forward Integration

JEL Classification: M41, M48, G34, G32

Suggested Citation

Srinivasan, Padma, Corporate Governance Issues and Stake Sale to Fund Acquisitions - TJLR Deal (September 16, 2009). Available at SSRN: https://ssrn.com/abstract=1474190

Padma Srinivasan (Contact Author)

Manipal University, Bangalore Campus ( email )

Bangalore, Karnataka
India

HOME PAGE: http://www.manipal.edu

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