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Tatas eye buyouts in UK's leather sector

Chairman Ratan Tata may insist that his group is not on an 'acquisition spree' but the Tata brand seems all set for some more M&A action.

, TNN|
Oct 02, 2007, 02.43 AM IST
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LONDON: Chairman Ratan Tata may insist that his group is not on an ‘acquisition spree’ but the Tata brand seems all set for some more M&A action. The Corus acquisition and the ongoing bids for Jaguar-Land Rover have given a new big push to the group’s growth agenda through the inorganic route.

The Tata group is now looking at acquisitions in leather through it’s subsidiary TIL Footwear to make a big bang entry into the $7.7-billion leather industry in the UK.

“We could look at something on the lines of what we did earlier... the Tetley kind of acquisition, which marked our entry into beverages in the UK,” Tata UK, MD, SA Hasan told ET. “We are still mulling whether to acquire a brand or use the Tata label to move up the value chain in leather products,” he added.

TIL is a major supplier of footwear uppers to well-known customers across the world. There’s a feeling within the group that the Corus deal has brought brand Tata to the forefront in the UK and there’s a need to leverage that heightened saliency to expand business interest in the country.

“From a brand that was hardly known at the time of the Tetley acquisition, brand Tata is now taken with a great deal of seriousness and this has influenced the way we look at future growth strategies in the UK,” Mr Hasan said.

The company has hired London-based communication consultant Financial Dynamics to build on the Tata equity through a multimedia campaign. The brand would then be leveraged to expand business across sectors. Tata has 13 companies across different sectors in the UK.

The company is also looking at the relaunch of its car Indica, which it temporarily sold under the City Rover badge four years ago. The marketing arrangement with Rover didn’t work out due to poor pricing strategy that pitched the car against heavyweights.

“At £5,500-9,000 price range, the odds were heavily loaded against Indica Rover when there were European cars selling at £5,000,” said a senior Tata executive. But the group feels it can do a better job and the relaunch would happen under the aegis of Tata Motors and not through a third party.

Meanwhile, the Tata group is also looking at the food and film industries in the UK. There are definitive plans to take restaurant brand Bombay Brasserie further as a retail brand. “We have already made a beginning by placing culinary products under Bombay Brasserie in retail chains such as Sainsbury and going forward we would like to build on that,” Mr Hasan said.

The group has many plans and is looking at inorganic growth in a big way. “We would like to look at areas in which we have strengths,” Mr Hasan added.At a recent media briefing on Corus, Ratan Tata had said his group would look at acquisitions only if they made strategic sense.

The group’s UK push is also part of a larger strategy. At the same meeting, Mr Tata had said the group was looking for a “greater automotive presence in the UK”. That includes a new pan-sectoral tech centre in Coventry that the group has lined up.
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