Tata Group wants to expand in China but it is more likely to do so through joint ventures and the company’s own start-ups than through major mergers.
May also launch its own start-ups
BEIJING: Tata Group wants to expand in China but it is more likely to do so through joint ventures and the company’s own start-ups than through major mergers and acquisitions, a senior official at the company said on Tuesday.
Tata has sized up big China purchases in the past only to be deterred by corporate governance concerns, high asset prices and regulatory blocks, Alan Rosling, executive director at Tata Sons, the holding company of Tata Group, said in Beijing.
“We in fact are increasing the emphasis on China as part of our strategy,” he said. “But like most emerging markets, the bulk of what you do is going to be built in from scratch or joint ventures, rather than taking over an existing business.”
Among Tata Group’s activities in the dragon land, Tata Steel Ltd operates finishing plants and Tata Motors sources automotive components, Rosling said.
“There are many things you can do in China that don’t involve mergers and acquisitions,” he said.
Tata Group is on track to earn more in foreign shores than in India in the fiscal year ending March 2008 because of the $12.9 billion purchase of Anglo-Dutch steel maker Corus by Tata Steel.
The aim for Tata now is to strike a balance between hunting for deals abroad and investing more in its core market of India where opportunities abound, Rosling said.
“The reality is we have got to do both — you do things in a mix,” he said.
Rosling declined to comment on reports of a Tata Motors’ bid for Jaguar and Land Rover, the European luxury brands of United States-based carmaker Ford Motor Co.
“Tata Motors has used acquisitions in the past and Tata Motors, I am sure, will carry on looking at acquisitions in the future,” he said.
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