With the world’s financial situation tightening and inflation hitting the roof due to rise of oil and commodity prices,..there is a definite slowdown in US and European markets. What are the BRIC countries business doing ? They are preparing for more M&As for sure.

Financial Express reports
 The current turbulence in world financial Markets notwithstanding, there exists a positive attitude among private business owners in emerging economies, particularly in India and China, toward mergers and acquisitions, says a global survey.

“Privately held businesses (PHBs) in the fast growing economies such as mainland China and India see international M&A as one means of progressing up the value chain through acquisition of brands and distribution channels in North America and Europe,” Grant Thornton India M&A partner Pankaj Karna said. Read the rest of this entry »

After 8 to 9 months of comprehensive evaluation, FORD has done the deal with Tatas to sell their Jaguar and Land Rover businesses. The deal may cost Tatas over 2B USD. Ford has sold these brands for less than half of its original purchase price.

Times of India reports 

The Government on Wednesday showered rich compliments on the Tata Group for acquiring Jaguar and Land Rover car brands and holding India’s flag high in the highly competitive international business.

“My congratulations to the Tatas and entire corporate world as they have held India’s private sector flag high. The world is looking at India,” Commerce and Industry Minister Kamal Nath said in New Delhi.

He said homegrown Indian firms have demonstrated to the global business how competent and progressive they have become even in the midst of a slowdown.

“The most important thing is that world is recognising India’s credibility”. Read the rest of this entry »

In a tough financial climate, Tata Motors is still able to raise 3B debt (short term) to enable it to go through the purchase of Jaguar and Land Rover from Ford Motors.

Times of India reports

Tata Motors has signed a deal to receive a $3 billion one-year bridge loan from Citigroup and JPMorgan to help finance a potential purchase of luxury brands Jaguar and Land Rover, sources familiar with the deal said on Tuesday. “It is signed, but it’s still at an early process,” said one of the sources, who was not authorised to speak to the media.

A separate source briefed on the deal later said the loan would be for one year. Citigroup, JPMorgan and Tata Motors all declined to comment. Tata is expected to agree on a deal by the end of the month to purchase the two well-known UK brands from US auto maker Ford Motor, according to reports in India.

The Indian firm could raise up to $4 billion on domestic and overseas debt markets, based on its previous announcements and media reports. Tata is believed also to need money to help pay for the manufacturing of the world’s cheapest car, the Nano, that it will launch in the second half of the year. But Tata will face a tough debt market environment, as a global financial crisis has raised the premiums demanded by investors, especially from riskier Asian issuers.

Read the rest of this entry »

PTI News

Indian conglomerate Tatas are set to be named on Friday the top choice for buying the US auto giant Ford’s iconic British brands Jaguar and Land Rover, according to a media report.

“The group has had its 1-billion pound bid accepted by Ford, the firm has beaten off competition from rival Indian firm Mahindra and Mahindra and private equity group One Equity Partners,” Birmingham Post reported on Thursday.

The report quoted unnamed sources at Land Rover as saying, “It is definitely Tata. There is one final meeting and so long as there is no last minute hitches, which are not expected, then an announcement will be made on Friday.” The final details would be worked out in the next six weeks, it added.

The report also quoted a union official as saying that Mahindra’s bid fell flat because of links to a private equity firm as the Indian firm was working with Apollo.

“When a private equity firm buys a company, the cost of buying it often goes onto the companies books. If anything then goes wrong how do you refinance the business?” industry officer for the Transport and General Workers’ Union section of Unite, Des Quinn, said. Read the rest of this entry »

Britain’s major union in its statement today has preferred the Tata bid for the sale of Rover and Jaguar. Tata, M&M and private equity player One Equity are in race for this sale. Looks like India Inc is getting into top gear.
Economic Times reports

The Tata Group has emerged the front-runner for Jaguar and Land Rover with workers of the two UK carmakers, being sold by Ford, backing its bid. Unite, Britain’s main trade union in the auto sector, on Thursday issued a statement saying the Tata Group is their preferred choice to take over Jaguar and Land Rover should they be sold.

While such approval is not binding in any way, Ford would prefer to conclude the deal with the union’s go-ahead, as it will continue to remain a large employer in the UK.

However, highly-placed sources say there are differences of opinion within Unite—the union that represents the workers of Jaguar and Land Rover. “There is no consolidated view coming out of the unions yet and different factions are supporting different bidders,” said a source close to the development. While the Tata bid is being backed by 60 senior shop stewards, Mahindra and Mahindra (M&M), the other Indian entity in the race, has reportedly found favour with Unite joint general secretary Tony Woodley.

The Unite statement said shop stewards agree that Tata fits their category, but a source close to the development says M&M presentation to the union struck a chord with Woodley. The source maintained that notwithstanding Unite’s statement, there is no unanimity among its rank and file on the issue.

The official statement released by Woodley, on Unite’s behalf, made it clear that if a sale does take place, the union would support a “partner with an established presence and background in manufacturing’’. This would mean the two marquee brands will go to an Indian entity as the only other bidder is private equity player One Equity.

Unite is Britain’s largest trade union and was formed in May this year following a merger of amicus and the Transport and General Workers Union. The three bidders met the convenors of the plants and Woodley on November 20.

Unite’s statement said that based on reports from their representatives who attended the meeting where the bidders made presentations and to serve “the best interests of the union members…the stewards agreed that Tata best fits these criteria.” Unite said that as the union has signed a confidentiality agreement with the company, that is all that they can comment on at the moment.

“Anand Mahindra’s presence at that meeting with the unions made a difference for M&M,” said a person in the know of the negotiations. The Tata presentation, on the other hand, was headed by Tata Motors MD Ravi Kant who assured the unions that there would be fresh investments in the brands. Read the rest of this entry »

Resource-rich Brazil is in the crosshairs of world mining giants as they race to uncover new deposits to feed red-hot demand for metals from fast-growing economies such as China.

Analysts say the possible mining sector takeover of Rio Tinto by BHP Billiton would boost competition for CVRD on its home turf in Brazil, where some of the world’s richest iron ore reserves are located.

Brazil-based mining sector consultants said on Monday such a tie-up was good for new projects and unlikely to trigger antitrust restrictions in the world’s second-largest iron ore exporting country after Australia. CVRD, in its turn, is the world’s No. 1 iron ore exporting firm.

BHP, the world’s biggest mining house, mapped out its plan on Monday to acquire rival Rio Tinto, signalling it was ready for a long fight despite Rio Tinto’s rejection last week of its $US140 billion ($A154.79 billion) takeover proposal as too low.

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The Age Reports

We have seen many M&A s dont work as best as they are expected to do and some go really bad.

Some work beautifully especially if a emerging country company buys a western brand company. A case in point is Tata Tea buying Tetley of UK, Lenovo buying IBM PC, …Similar benefit is expected out of Tata steel aquisition of Corus. What do these emerging country company brings on to the table for success ?

They have definitely built a successful business out of not so easy business environment in the past. Now they have perfected the model and with easy access to capital, they are able to go for global brand and markets.

China View reports

Lenovo Group Ltd reported Thursday a better-than-expected jump of 177 percent in net profit year on year in the third quarter due to the booming laptop computer business and robust global demand.

Lenovo, which acquired IBM’s personal computer business for 1.25 billion U.S. dollars, said it will switch completely from IBM to the Lenovo brand, two years ahead of schedule, Lenovo’s chief executive William Amelio revealed.

China’s top computer maker, which ranks No. 3 globally, posted a net profit of 105.26 million dollars in its fiscal second quarter ended on September 30, against 37.89 million dollars a year earlier. The result beat analysts’ average forecast of 88 million dollars.

Revenue totaled 4.4 billion dollars, a 20-percent growth from a year ago.

Read the rest of this entry »

Tatas and Jack Naseer, former CEO of Ford, led One Equity are likely to be narrowed for the second round of the bids out the six contenders.

All interested parties have toured the plants and have done their homework on the opportunites of new Jaguar model.

From Tata’s point of view this would be a great entry in to the developed markets and also gives a huge opportunity with in their strong base of indian market.