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A presentation made by R Gopalakrishnan at a Rajiv Gandhi Centre event at Imperial College Business School on 10 November 2008
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1
““How do M&As inspire How do M&As inspire Innovation”Innovation”
R Gopalakrishnan1
‘Conversation with India’
Imperial College Business School
London
Nov 10, 2008
What Innovation is - (1)
2
Impact of Innovation
Low High
Organizational Evolution
High
What Innovation is – (2)
Four types of InnovationFour types of InnovationFour types of InnovationFour types of Innovation
Difficulty of Replication
Foo
tprin
t of
Im
pact
3
4
PartnershipMode
M&A Lessons – (1)
Mindset
Share
Tell
Conqueror Expander
5
M&A Lessons – (2)
The connection between the domestic core business and the overseas expansion should be clear, defined and pursued with persistence
The connection between the domestic core business and the overseas expansion should be clear, defined and pursued with persistence
The post merger integration & processes must be consistent with the strategic intent of the acquisition
The post merger integration & processes must be consistent with the strategic intent of the acquisition
The absolute core and non-negotiable values of the acquiring company need to be explicit to the acquired company managers
The absolute core and non-negotiable values of the acquiring company need to be explicit to the acquired company managers
The positioning of the business in the host country should be harmonious with the actions of the company
The positioning of the business in the host country should be harmonious with the actions of the company
It is important to engage with the society in which the business is located, even if level of engagement is small
It is important to engage with the society in which the business is located, even if level of engagement is small
6
M&A Lessons – (3)
Cross-Border M&A with regards to Commercial VehiclesCross-Border M&A with regards to Commercial VehiclesCross-Border M&A with regards to Commercial VehiclesCross-Border M&A with regards to Commercial Vehicles
Cross-Border M&A with respect to Social ApplicationCross-Border M&A with respect to Social ApplicationCross-Border M&A with respect to Social ApplicationCross-Border M&A with respect to Social Application
Cross-Border Acquisition through the Leveraged Buy-Out routeCross-Border Acquisition through the Leveraged Buy-Out routeCross-Border Acquisition through the Leveraged Buy-Out routeCross-Border Acquisition through the Leveraged Buy-Out route
M&A Lessons – TATA Novus (1)
Tata Motors Acquired Daewoo Commercial Vehicle Co on 29th March 2004
• Mainly on-road application
• Strong product support
• Mainly off- road application
• Limited Product support
High-end tippers: European Origin
Expensive, difficult to maintain
Conventional tippers: Indian Origin
Limited speed and Gradeability
M&A Lessons – TATA Novus (2)
Produced in an exclusive facility jointly set up by South Korean & Indian teams at Jamshedpur
Power &
performance of
High-end
tippers
Economy &
Support of
Conventional
tippers
M&A Lessons – TATA Novus (3)
Tata Chemicals acquired Magadi Soda in 2006
M&A Lessons – Magadi Soda (1)
Tata Chemicals learning
from Masai Leaders
Masai leaders learning
from Tata Chemicals
M&A Lessons – Magadi Soda (2)
In 2000, Tata Tea acquired Tetley in the largest cross-border deal by Indian company.
-Tetley was four times the size of Tata Tea- 1st Leveraged Buy-out (LBO) by Indian Company
M&A Lessons – Leveraged Buyout (1)
TATA have applied the LBO route to other Acquisitions
M&A Lessons – Leveraged Buyout (2)
14
Thank You…Thank You…