Mergers, Acquisitions and Corporate Restructuring — DU Bachelor of Management Studies Previous Year Question Papers

(UGCF): NEP 2025 1. The Eclectic Paradigm In 2008, Tata Motors, an Indian automobile giant, acquired British luxury brands Jaguar and Land Rover (JLR) from Ford for $2.3 billion. The acquisition was guided by the Eclectic Paradigm (OLI Model), which evaluates Ownership, Location, and Internalization advantages in foreign direct investment decisions. Despite the global financial crisis, Tata Motors leveraged structured financing and internal reserves to complete the deal. The acquisition aligned with its goal of entering the luxury market, expanding beyond commercial vehicles. Owning JLR also granted access to advanced automotive technology, including high-performance engines and luxury design expertise, enhancing Tata's own The ÜK's strong automotive ecosystem further supported Tata's decision. JLR's established manufacturing plants, extensive supply chains, and highly skilled workforce reduced operational risks. Additionally, its presence in the UK provided strategic access to European and North American markets. The brand's advanced research facilities helped Tata strengthen its capabilities in electrification and autonomous driving technologies. Tata Motors opted for full acquisition instead of licensing or joint ventures to retain complete control over JLR's operations. This approach allowed streamlined decision-making, better cost efficiency and direct access to proprietary designs, patents and branding. By internalizing JLR, Tata minimized risks from third-party dependencies while maximizing profitability. Though initially facing financial strain and scepticism, Tata's strategic investments in new models and global markets revitalized JLR. By 2015, JR had become a key revenue driver, demonstrating the long-term success of Tata's acquisition strategy. Analytical Questions : (a) How did Tata Motors' ownership advantages influence its ability to integrate JLR ? (b) What location factors made the UK an attractive investment destination for Tata ? • (c) Why did Tata Motors prefer full acquisition over other entry strategies, and what risks did it face? 6+6+6 (a) How does the Competition Act, 2002 addréss monopolies and abuse of dominant positions ? • 9 (6) Explain the different types of takeovers as per the SEBI Takeover Code 2011. How do open offers and creeping acquisitions work under the regulatory framework? 9 If an acquiring company (Company A) has total earnings of Rs. 30 Lakhs, 8 Lakhs outstanding shares, and a market price of Rs. 14 per share, calculate the maximum exchange ratio. The target company (Company B) has total earnings of Rs. 16 Lakhs, 5 Lakhs outstanding shares. Assuming the P/E ratio of the merged firm is 35, 40, 45, or 50, calculate the maximum exchange ratio that would be acceptable to the shareholders of Company A at different levels of P/E multiple. 18 4. Calculate the Economic Value Added (EVA) for Company A, given the following details : Share capital (Equity) : Rs. 20.00 Lakhs