Companies
Ratan Tata: The man who took Tata global, from Tetley to Jaguar Land Rover
Summary
- The eponymous group made several bold acquisitions overseas—from Tetley to Jaguar Land Rover.
If one were to undertake the extensive task of summarizing Ratan Tata’s illustrious tenure as Tata Group’s chair in one statement, they would not be wrong in calling him ‘the man who took Tata and corporate India international.’
Under Tata, the eponymous group made several bold acquisitions overseas—from Tetley to Jaguar Land Rover (JLR). Many of these transactions have stood the test of time, a testament to Tata’s business acumen. For instance, JLR today brings in nearly four-fifths of Tata Motors’ revenues, not to mention the back-end benefits of technology transfer and brand halo.
There have been some miscalculations too, notably Corus’s steel operations in Europe. Even today, Tata Steel UK continues to be a drag on Tata Steel’s financials.
“I hope that a hundred years from now we will spread our wings far beyond India, that we become a global group, operating in many countries, an Indian business conglomerate that is at home in the world, carrying the same sense of trust that we do today," Ratan Tata said in 2004.
Indian School of Business professor and author Kavil Ramachandran says that to “boldly explore overseas as part of a strategy to be a global powerhouse in engineering space" was one of Ratan Tata’s major undertakings.
“He wanted to make Tatas present across the spectrum of automobile industry, ranging from the pioneering idea of a small car Nano to the most luxurious car, Jaguar. That is a reflection of a global vision for Ratan Tata," Ramachandran said.
Acquiring Tetley
The journey to ‘internationalise’ Tata Group began in 2000 with the acquisition of Tetley by Tata Tea. The strategy was simple—Tata Tea, one of the largest tea producers globally, squarely lagged Unilever in terms of tea sales in India. The company had no global presence, and it made miserly margins from tea trading compared to what big brands made. That is when the opportunity presented itself as Tetley’s owners looked for an exit.
It was a bold bet—Tetley was the second-largest tea seller globally—back then was thrice the size of Tata Tea. The Indian company paid a princely £271 million (about ₹6,300 crore in today’s value) for the British brand.
The acquisition gave the Tata Group the taste of international expansion. What would follow was a decade of aggressive dealmaking, with Tata group firms making over a dozen big-ticker international acquisitions.
The next big purchases were of Daewoo Commercial Vehicles by Tata Motors in South Korea and NatSteel in Singapore by Tata Steel. While Tata Motors managed to digest the acquisition, it didn’t work out so well for Tata Steel. The acquisition gave Tata Steel access to small electric arc steel mills in China, Thailand, Vietnam, the Philippines and Australia. But the operations were not nearly as profitable, and Tata Steel ultimately sold the company at a loss in 2021.
Brunner Mondi
Next on Tata’s radar was British chemicals maker Brunner Mond, in which Tata Chemicals acquired a major stake in 2006.
Meanwhile, Tata Steel’s fate of bad acquisitions didn’t end with NatSteel. In 2007, Ratan Tata led the high-stakes acquisition of Anglo-Dutch steelmaker Corus. Back then he called it “a major step forward in the Company’s global strategy." The acquisition propelled the oldest steelmaker in Asia into one of the largest players globally with nearly 27 million tonnes of capacity.
In hindsight, this was perhaps one of the bigger missteps by Tata as far as international acquisitions go. Tata Steel paid $12 billion for the company at the height of a commodity upcycle. What followed was the debilitating global financial crisis from which the UK steel industry never recovered. Even today, Tata Steel UK bleeds millions of dollars a year.
Jaguar Land Rover
Tata’s penchant for acquisitions in the UK gave rise to a nationalist fervour in India, with many calling the big-ticket transactions a reverse colonization. The acquisition spree culminated into perhaps the most prestigious acquisition under the aegis of Ratan Tata—the buyout of Jaguar Land Rover from Ford.
The $2.3 billion transaction put Tata Motors on the global map.
"This is a momentous time for all of us at Tata Motors," Tata said back then. “Jaguar and Land Rover are two iconic British brands with worldwide growth prospects."
It was also a personal redemption for Tata. A decade prior, Tata Motors had tried to sell its ailing passenger car division within a year of inception to Ford. However, during the negotiations, Ford executives allegedly mocked Tata Motors. The deal was eventually called off.
"This was in 1999 and come 2008, the same Ford's JLR was bought by us. Ford chairman Bill Ford thanked Tata, saying 'you are doing us a big favour by buying JLR'," Pravin Kadle, a Tata Group veteran, recalled during an awards function in 2014.
