Impact of an oversea acquisition by an emerging market MNC : a case study of the Jaquar Land Rover acquisition by Tata Motors

Abstract

The role and growth of multinational corporations (MNCs) from emerging markets have become active subjects of discussion among international economics and international political economy theorists. In recent years, MNCs from emerging

markets such as India have become increasingly visible on the global stage, especially when they engage in bold activities such as acquiring long-established companies or brands from developed markets. One such acquisition is the purchase of Jaguar Land Rover by Tata Motors, part of India's Tata group, in 2008. Jaguar Land Rover was struggling financially when it was sold by American car giant Ford to the Indian MNC. To Tata Motors' credit, it managed to turn around the financial fortunes of the iconic car brands. However, there were certain strategic motivations that prompted the Indian company to make the acquisition. This paper argues that those goals were not fully met. The acquisition has not improved the

knowledge and skills base of Tata Motors or diversified the Indian company's business operations even though the acquisition of two global brands gave immediate access to

new markets and an international distribution and marketing network. The paper seeks to understand the success of acquisitions by Indian MNCs from the perspective

of whether these acquisitions help in improving the acquirer's competitive strengths.