Mergers and Acquisitions in Automobile Industry

Topics: Automotive industry, Mergers and acquisitions, Tata Motors Pages: 33 (9268 words) Published: July 3, 2013
Table of Contents

1. Student Background & Course Details2
1.1 Course Details2
1.2 Semester Details2
1.3 Student Details2
1.4 Academic Advisor2

2. Topic of Research3
2.1 Research Topic3
2.3 Statement of Purpose3
3.1 Introduction to Mergers & Acquisitions in Automotive Industry4 3.2 Rationale of research project4
3.3 Statement of Research Objectives4

4. THEORETICAL FRAMEWORK5
4.1 Mergers & Acquisitions5
4.2 Recent Trends in Automotive Mergers & Acquisitions5
4.3 Debates in the field of M & A6
4.4 Key Research components6
4.5. Schematic Diagram7

5. LITERATURE REVIEW8
5.1 Mergers& Acquisitions8
5.2 Types of Mergers & Acquisitions8
5.3 Advantages of Mergers & Acquisitions8
5.4 Disadvantages of Mergers & Acquisitions10
5.5 Driving Forces Behind Automotive Mergers and Acquisitions10 5.6 The long-term success of M&A in the automobile industry:12 5.7 Case Study - Merger of Daimler-Benz & Chrysler AG14
5.9 Case study – Nissan Renault Alliance15
5.10 Case study – Tata- Jaguar Land Rover16

6. Methodology18

7. Data Analysis19
7.1. Industry Analysis19

8. Conclusion20

9. Bibliography21

10. Appendix25

1. Student Background & Course Details

1.1 Course Details

Field Research Project (FRP) - An IIP initiative under the GMBA program

1.2 Semester Details

GMBA December 2012 batch
December –March leg (Sydney Campus)

1.3 Student Details

Specialization – Investment Banking

1.4 Academic Advisor

2. Topic of Research

2.1 Research Topic

Merger & Acquisitions in Automobile Industry

2.3 Statement of Purpose

There has been a surge in the mergers and acquisitions (M&A) activity in the motor vehicle industry since 1995 due to many factors such as technological factors, cost considerations, excess capacity, political and regulatory factors. This research examines the recent trends and drivers of mergers and acquisitions (M&A) in the automobile industry. Additionally the research also explores the relative impact of such a consolidation on the motor vehicle industry as a whole and the future of the industry post such consolidation activities.

3. INTRODUCTION

3.1 Introduction to Mergers & Acquisitions in Automotive Industry

Globalization is rampant and the meaning of physical borders is becoming less and less important day by day. We live in a multicultural and multifaceted world, which is dominated by multinational corporations and cross border transactions. Mergers and Acquisitions (M&A) whether cross border or whether domestic have garnered significant attention since the last century. Automotive industry hailed as ‘industry of industries’ by Peter Drucker, the pioneer of the study of management, has continuously evolved from craft production in 1890s to mass production in 1910s to lean production techniques in the 1970s (ChithraGopal). From horseless carriages to production of modern cars and commercial vehicles reached to approximately 80 million in 2011 (OICA).

Automobiles for the public market came into existence in 1896 and have since undergone dramatic changes (Automotive History). The ride for sure hasn’t been smooth. Taking a case in perspective the global financial crises (GFC), which started in 2008, completely altered the dynamics of the global automotive industry whether the player be a light vehicle producer or whether it be a supplier. GFC lead to significant volume falloffs in production, however at the same time the industry went into a major consolidation mode. Through a major wave of mergers, acquisitions, bankruptcy filings, spinoffs, etc. in 2008 and 2009 which culminated with the IPO of general motors in November 2010 the industry has a renewed...

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