March 26, 2008 Major Overseas
Acquisitions by Tata Group
New Delhi
With the takeover of two British automobile marquees Jaguar and Land
Rover, the $28.8 billion Tata group, with 98 companies in its fold,
will add another prominent entry to its growing roster of global
acquisitions.
Barely a year ago, it paid over $12 billion to acquire Anglo-Dutch
steel maker Corus, in what remains the largest buy-out deal overseas
by an Indian company till date.
And going by what senior executives of Tata Sons - the holding arm
of the group that has 27 listed companies - maintain, the appetite
for such mega mergers and acquisitions is only growing with each
deal.
Tata Steel has made three major acquisitions worth some $13 billion
in the past few years.
"A journey that began long ago is gathering pace," said chairman
Ratan Tata on the overseas foray of the group that has interests in
consumer goods, chemicals, energy, services, engineering, materials
and IT systems and communications.
"From IT and tea to automobiles and steel, Tata companies are
spreading their wings to find a place in the global sun," he says.
Here's a look at some notable acquisitions by the Tata group
companies overseas in the past few years:
Tata Steel:
The company, which celebrated its centenary in August last year,
wants to boost its annual output of 8.7 million tonnes to 15 million
tonnes by 2010, and take it upwards to 30 million tonnes by 2030.
More stunning moves on the mergers and acquisition front can
definitely be expected, it says.
In January 2007, the group pulled off India's biggest ever takeover
of an overseas company to buy Anglo-Dutch steel-maker Corus in a $12
billion deal that made it the combined entity the world's fifth
largest producer of the commodity.
This came just over a year after it acquired Singapore's NatSteel,
which also has a presence in Thailand, China, Malaysia, Vietnam, the
Philippines and Australia followed by the acquisition of Thailand's
Millennium Steel for a $421 million.
Tata Motors:
South Korea's Daewoo Commercial Vehicle Co was acquired by the
company in March 2004 for $102 million and gained, in the process, a
market share of 30 percent and access to markets where it had no
prior presence.
This was followed by the acquisition of a 21 percent stake in
Spanish bus maker Hispano Carrocera for $18 million with an option
to pick up the remaining stake at a later date. This helped the
company get technology to make top-end busses.
Another company in the fold - Tata Technologies, which provides
automotive engineering and design services - bought Britain's Incat
International for $53 million.
Tata Consultancy Services:
This company, which was earlier a division of Tata Sons, has been
among the most aggressive shoppers for companies overseas. It has
acquired six companies in recent months, though the net value of the
deals is no more than $100 million.
In the second half of 2005, following the merger of group company
Tata Infotech into its fold, TCS acquired financial services company
FNS of Australia for $26 million and then Chile's outsourcing major
Comicrom for $23 million.
TCS, which has 160 offices in 30 countries, also entered into a
structured deal with the British insurance major, the Pearl Group,
which essentially called for the two entities to set up a subsidiary
with TCS as the majority partner.
Videsh Sanchar Nigam Ltd:
The Tata group acquired the former state-run, international telecom
carrier a few years ago. The company has made several overseas
acquisitions since then with the aim of becoming a top-end services
provider in the industry.
Some of the acquisitions include undersea cable company Tyco of the
US for $130 million, Internet service provider Dishnet's India
division for $64.28 million and international telecom service
provider Teleglobe of US for $239 million.
Tata Chemicals:
Following its acquisition of Hindustan Lever Chemicals, Tata
Chemicals was on the lookout for a steady supply of phosphoric acid
for its newly acquired plant at Haldia.
It, accordingly, took over two overseas for a total value of $215
million - Indo Maroc Phosphore of Morocco in March 2005 and Brunner
Mond Group of Britain in December last year. Morocco produces over
50 percent of world's rock phosphate.
Tata Tea:
In 2000, Tata Tea bought British giant Tetley for a $407 million -
in what was then the largest such deal by an Indian company - and
started scouting for similar deals to become a global tea and
related drinks brand.
Another acquisition has been a 33 percent stake in South African
Joekels Tea Packers for an undisclosed amount that was announced
this month. It had earlier acquired the US-based Good Earth Corp for
$32 million.
The company's other picks include Czech Republic's Jemca and 30
percent stake in the US-based favoured water manufacturer Glaceau
for $677 million.
Indian Hotels:
This company, which runs the Taj Group of hotels, acquired several
hotels abroad for $121 million in the past few years. It has set
aside $100 million for future acquisitions in Europe, the Middle
East, Asia and the US.
In December 2006, it acquired W, a hotel at the Woolloomooloo Bay in
Sydney, then it took over the management of The Pierre, a luxurious
landmark hotel on New York's Fifth Avenue. India Hotels has 39
hotels in India and 18 worldwide.
Another acquisition was Campton Place Hotel in San Francisco
Tata AutoComp Systems:
This company - which makes auto components from 14 plants, three
engineering centres and three export-oriented units for clients like
General Motors, Ford and Toyota - acquired W? Weidinger of Germany
for $7 million last year.
Tata Interactive Systems:
A pioneer in simulations business in India, this company too made
acquired several companies overseas - Notably Tertia Edusoft GmbH of
Germany and Tertia Edusoft AG of Switzerlandm - and is keen on more
buy outs in the future.
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