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4-11 - International Acquisitions Emerging Market Bidders...

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4-11-2011 International Acquisitions Emerging Market Bidders/ Tata Case— Readings: Tata Case, “How emerging giants are rewriting the rules of M&A” Before 2000, BRIC were only 2% of global activity but now 15%-20% of targets acquired but really BIC countries (now make up more than half of bidders) Tata Group o 139 years old, run by Ratan Tata o Functions as a holding conglomerate company o When Ratan took over, consolidated into 7 sectors and 96 companies (from approx 300 companies) Strengthened and centralized company (charged for brand name Tata) and with that money, marketed the Tata brand Tata group owned little of organizations so increased Tata share to at least 26% share to have at least some power Companies have to be economic value added (EVA) positive—must cover cost of capital every year after factoring the hurdle rate: EVA=profit (cash flow)/total invested capital o He wants companies to go global via acquisitions o
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