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Mergers and Acquisitions in Automobile Industry

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Mergers and Acquisitions in Automobile Industry
Table of Contents

1. Student Background & Course Details 2 1.1 Course Details 2 1.2 Semester Details 2 1.3 Student Details 2 1.4 Academic Advisor 2

2. Topic of Research 3 2.1 Research Topic 3 2.3 Statement of Purpose 3 3.1 Introduction to Mergers & Acquisitions in Automotive Industry 4 3.2 Rationale of research project 4 3.3 Statement of Research Objectives 4

4. THEORETICAL FRAMEWORK 5 4.1 Mergers & Acquisitions 5 4.2 Recent Trends in Automotive Mergers & Acquisitions 5 4.3 Debates in the field of M & A 6 4.4 Key Research components 6 4.5. Schematic Diagram 7

5. LITERATURE REVIEW 8 5.1 Mergers& Acquisitions 8 5.2 Types of Mergers & Acquisitions 8 5.3 Advantages of Mergers & Acquisitions 8 5.4 Disadvantages of Mergers & Acquisitions 10 5.5 Driving Forces Behind Automotive Mergers and Acquisitions 10 5.6 The long-term success of M&A in the automobile industry: 12 5.7 Case Study - Merger of Daimler-Benz & Chrysler AG 14 5.9 Case study – Nissan Renault Alliance 15 5.10 Case study – Tata- Jaguar Land Rover 16

6. Methodology 18

7. Data Analysis 19 7.1. Industry Analysis 19

8. Conclusion 20

9. Bibliography 21

10. Appendix 25

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


Bibliography: 1. UK, Plimsoll Publishing Ltd. "World Market Automotive Retail - market research report." Find Industry reports, Company profiles and Market Statistics. N.p., n.d. Web. 13 Feb. 2013. . 2. Agency, Governmental. "Automotive Industry: Market Research Reports, Statistics and Analysis." Find Industry reports, Company profiles and Market Statistics. N.p., n.d. Web. 19 Feb. 2013. . 3. "Automotives and Components Global Report -2010." IMAP Industrials Report. N.p., n.d. Web. 5 Feb. 2013. www.ascendant.hr/docs/imap_sector_reports/AutoIndustryReport_WEB_0E7D3D1839347.pdf 4 5. "Auto Sales - Markets Data Center - WSJ.com." The Wall Street Journal - Breaking News, Business, Financial and Economic News, World News & Video - Wall Street Journal - Wsj.com. N.p., n.d. Web. 14 Feb. 2013. . 6. Ted, Chu, and Yingzi Su. "Will the U.S. Auto Market Come Back?." Business Economics 45 (2010): n. pag. Business Source Premier. Web. 5 Feb. 2013. 7. Badrtalei, J., & Bates, D. L. (2007). Effect of Organizational Cultures on Mergers and Acquisitions: The Case of Daimler Chrysler. International Journal of Management, 24(2), 303-317. 8. "Cross-Border Mergers, Acquisitions, and Valuation." Cross-Border Mergers, Acquisitions, and Valuation. N.p., n.d. Web. 16 Feb. 2013. 9. Driving Value Automotive M&A Insights 2011." Driving Value Automotive M&A Insights 2011. N.p., n.d. Web. 10 Feb. 2013. 10. Automotive M&A Getting ready for the next wave." Automotive M&A Getting ready for the next wave. N.p., n.d. Web. 12 Dec. 2013. 11. Stevens, M. (2008). Foreign Influences on the Japanese Automobile Industry: The Nissan-Renault Mutual Learning Alliance. Asia Pacific Business Review, 14(1), 13-27. doi:10.1080/13602380701660947 12 13. UNCTAD (1998), World Investment Report: Trends and Determinants. 14. MUELLER, D. (1989), “Mergers: Causes, Effects and Policies”, International Journal of Industrial Organization, 7:1, pp. 1-10. 15. PRICEWATERHOUSECOOPERS (1999a), Global Automotive Deals Survey 1998. 16. Fujimoto, T. (2001) Why Product Architectures Matter, Look Japan, 47(542), pp. 12–16. 17. Ghosn, C. & Rie`s, P. (2005) Shift: Inside Nissan’s Historic Revival (New York: Random House). 18. Alexandridis, G. G., Petmezas, D. D., & Travlos, N. G. (2010). Gains from Mergers and Acquisitions Around the World: New Evidence. Financial Management (Blackwell Publishing Limited), 39(4), 1671-1695. doi:10.1111/j.1755-053X.2010.01126. 19. Badrtalei, J., & Bates, D. L. (2007). Effect of Organizational Cultures on Mergers and Acquisitions: The Case of Daimler Chrysler. International Journal Of Management, 24(2), 303-317 20 21. Laabs, J., & Schiereck, D. (2010). The long-term success of M&A in the automotive supply industry: determinants of capital market performance. Journal Of Economics & Finance, 34(1), 61-88. doi:10.1007/s12197-008-9065-z 22 23. Feast, R., "Automotive mergers rarely meet expectations," Automotive News, 78(6069), December 1, 2003. 29. Narver, John. "Marketing and Controversy over Conglomerate Mergers." Journal of Marketing 31.3 (1967): 6-10. Ebsco Host. Web. 8 Jan. 2013. 30. Farrell, Joseph, and Carl Shapiro. "Horizontal Mergers: An Equilibrium Analysis." The American Economic Review 80.1 (1990): 107-126. Ebsco Host. Web. 16 Jan. 2013. 31. Matsushima, Noriaki. "Vertical Mergers and Product Differentiation." Journal of Industrial Economics LVII.4 (2009): 812-834. Ebsco Host. Web. 9 Jan. 2013. 32. "5 Types of Company Mergers | MBDA Web Portal." MBDA Web Portal. Minority Business Development Agency, n.d. Web. 16 Feb. 2013. . 35. "Automotive M&A Getting ready for the next wave." Deloitte . N.p., n.d. Web. 23 Jan. 2013. . 36. "Automotive M&A Outlook: Why Build When You Can Buy?." M&A International Inc. . N.p., n.d. Web. 17 Feb. 2013. . 37. UK, Plimsoll Publishing Ltd. "World Market Automotive Retail - market research report." Find Industry reports, Company profiles and Market Statistics. N.p., n.d. Web. 13 Feb. 2013. . 38. Agency, Governmental. "Automotive Industry: Market Research Reports, Statistics and Analysis." Find Industry reports, Company profiles and Market Statistics. N.p., n.d. Web. 19 Feb. 2013. . 39. "Automotives and Components Global Report -2010." IMAP Industrials Report. N.p., n.d. Web. 5 Feb. 2013. 40 41. "Auto Sales - Markets Data Center - WSJ.com." The Wall Street Journal - Breaking News, Business, Financial and Economic News, World News & Video - Wall Street Journal - Wsj.com. N.p., n.d. Web. 14 Feb. 2013. . 42. Ted, Chu, and Yingzi Su. "Will the U.S. Auto Market Come Back?" Business Economics 45 (2010): n. pag. Business Source Premier. Web. 5 Feb. 2013. 43. Suzik, Holly. "Merger mania ' consolidates auto industry." Quality 38.8 (1999): 12.Business Source Premier. Web. 6 Feb. 2013. 44. Robert, Sherefkin. "Will Wall Street jitters calm merger mania?." Automotive News71 (1997): 20C. Business Source Premier. Web. 19 Feb. 2013. 45. •M Anand (2008), “Cover Story Tata Jaguar Land Rover” Outlook Publishing. Web. 6 Mar 2013 . 46. "Tata Group | Tata Motors | Media releases | Tata Motors completes acquisition of Jaguar Land Rover." Tata group. N.p., n.d. Web. 7 Mar. 2013. . 47. Mehul Srivastava (2009), “Tata: Still reeling from its Jaguar Land Rover Buy”.Business Week Magazine online, (2009), Available on URL: http://www.businessweek.com/globalbiz/content/aug2009/gb20090811_307608, Web. 6. Mar 13] 48
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