I would'nt get too excited about Tata potentially buying LR and Jag (@ Steeroid - It will be package deal. Infact Bill Ford wanted to sell PAG together and from an inside source, Jac Nasser lowballed him so they decided to split PAG and sell it in bits but with the intention to sell Jag and LR together (Commands more value since Jag doesnt have a SUV lineup and LR doesnt have any sedans).
But I digress - Here's a few reasons why this deal won't happen and even if it does you will not see LR / Jag in India.
1) Ratan Tata's long term strategy is to get the group as much global exposure as possible. He was always limited by Tata Sons board and has finally convinced him to let a lot of international deals take place (Tata Steel, Indian Hotels, Tetley, TCS etc). But with another 5 to 6 Billion dollars required for both companies - I fear it may be too risky for the board to allow.
2) Corus - IMO (And another dozen WS analysts) Tata's overextended themselves with Corus. Overvaluation can be deterimental in the long run and if the global market demand for steel does not keep growing the way it is. Tata's may be in a lot of financial trouble (Never easy paying back a $10B+ dollar loan, esp when fuelled by over-zealous banks). So basically with Jag and LR, the group may be over burdended financially.
3) Glaceau - Many in India would not have heard of this company. Tata's bought a 30% stake into this company that sold flavored water under the brand Vitamin Water. Their plan was to buy the company out totally but had made clear intentions of never bringing it to India as there was a very limited market for flavored water (Similar limited market for Jag / LR). Coke later bought the Tatas 30% stake at an overvalued price and Tata netted about $450Million in a 8 month time frame. Won't be surprised if Jag and LR go the same route. |