Latest news with #Anglo-Dutch
Reuters
31-07-2025
- Automotive
- Reuters
Breakingviews - Tata's Iveco deal heeds lessons of its M&A past
MUMBAI, July 31 (Reuters Breakingviews) - The Tata group has a patchy record of overseas expeditions. Wednesday's all-cash 3.8 billion euros ($4.34 billion) agreed offer, opens new tab for Iveco's ( opens new tab non-defence businesses appears to avoid past M&A mistakes. The transaction will allow the conglomerate's $28 billion Tata Motors ( opens new tab to gain access to Europe without stretching its balance sheet, and returns look reasonable, too. Sure, the 5.8% average EBIT margin of the Iveco businesses Tata Motors is buying lags the acquirer's 9.1%. But the target's commercial-vehicle unit grew revenue almost 1% last year, per Visible Alpha. While hardly stellar, it's better than the roughly 5%, opens new tab drop suffered by the acquirer's top line. And the purchase will add a European presence to Tata's own trucks business, which is expected to be spun off by the end of December. It's also a tool for the Indian group, whose 2008 buyout of Jaguar Land Rover helped it develop India's top-selling electric car, to acquire the know-how key to achieving New Delhi's push to transition to battery-powered heavy vehicles. Some of Tata's previous overseas deals set a relatively low bar for success. It piled on leverage in its $12 billion buyout of Anglo-Dutch steelmaker Corus in 2007 and faced accusations of overpaying, to boot. Jaguar Land Rover only turned net-cash positive last financial year; slowing global growth and tariffs mean it's a mixed success, at best. Tata Motors' shares briefly dropped 2% after the deal announcement, reflecting fears the Indian truckmaker will borrow a heap more, months after its autos division turned net debt-free, opens new tab. Some of those concerns look unfounded. While Tata Motors' net debt will rise, it's likely to stay below 2 times one-year forward EBITDA, according to forecasts compiled by Visible Alpha. Its offer values Iveco's non-defence enterprise at just over 3 times its forecast operating income for the 2026 fiscal year, about one-third the multiple Motilal Oswal analysts ascribe to the acquirer's CV unit. Assuming the target's operating income rises to 1.48 billion euros by the 2028 fiscal year, as estimates gathered by Visible Alpha reckon, and applying a 27% tax rate, Tata Motors stands to earn a 16% return on invested capital, well over its 11.5% weighted average cost of capital, per LSEG. It's a sign the Tata group has learned painful yet valuable lessons from its past forays into cross-border takeovers. Follow Shritama Bose on Linkedin, opens new tab and X, opens new tab.
Yahoo
31-07-2025
- Business
- Yahoo
Shell announces further $3.5bn in share buybacks as profits beat estimates
Shell (SHEL.L) has announced a further $3.5bn (£2.63bn) in share buybacks, as profits beat expectations in the second quarter. The Anglo-Dutch energy major reported adjusted earnings of $4.3bn, which was down 24% on the same period last year but topped expectations of $3.74bn, according to consensus estimates provided by Vara Research. Shell CEO Wael Sawan said: "Shell generated robust cash flows reflecting strong operational performance in a less favourable macro environment. We continued to deliver on our strategy by enhancing our deep-water portfolio in Nigeria and Brazil, and achieved a key milestone by shipping the first cargo from LNG Canada." "Our continued focus on performance, discipline and simplification helped deliver $3.9 billion of structural cost reductions since 2022, with the majority delivered through non-portfolio actions." He said this enabled the company to launch another $3.5bn of share buybacks for the next three months, representing its 15th consecutive quarter of at least $3bn in repurchases. Shell warned in a trading update in early July that it expected to report lower trading and production results for its gas division in the second quarter. In Thursday's results, Shell reported cash flow from operating activities of $11.9bn, which was ahead of a consensus figure of $11.4bn. The company delivered a quarterly dividend of $0.3580 per share, unchanged from the first quarter. The latest earnings come against a backdrop of cooling profits across the oil and gas sector, which had surged to record levels in 2022. The industry has since been hit by weaker crude prices, a subdued demand outlook, and geopolitical volatility — including shifting US trade policy under president Donald Trump — all of which have dented investor sentiment. Last month, Shell dismissed speculation that it was in talks to buy rival BP (BP.L), saying it had "no intention of making an offer" for the FTSE 100-listed (^FTSE) oil major. Read more: Eurozone economic growth slows to 0.1% in second quarter Should you invest in gold? Trump's trade war hasn't harmed global growth outlook yet, says IMFError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Business Standard
30-07-2025
- Automotive
- Business Standard
Jaguar, Corus, Tetley: A look at Tata Group's biggest global acquisitions
The acquisitions of Tetley Tea, Corus Group, and Jaguar and Land Rover marked the salt-to-steel conglomerate's aggressive expansion streak in the 2000's New Delhi Tata Motors is reportedly close to finalising a $4.5 billion acquisition of Italian truck manufacturer Iveco from its principal shareholder, the Agnelli family. If completed, the deal would mark Tata Motors' second-largest acquisition to date. With a presence in over 100 countries, the Tata Group operates 30 companies spanning diverse sectors such as automobiles, consumer products, chemicals, engineering, energy, financial services, materials, IT services, and telecommunications. In 2000, Tata Tea, now known as Tata Consumer Products, acquired British tea brand Tetley for $450 million, marking one of the first major overseas acquisitions by an Indian business. Tetley, which holds a leading market position in the United Kingdom and Canada and ranks second in the United States by volume, was the subject of India Inc's largest cross-border acquisition of an international brand at the time. The deal positioned Tata as the world's second-largest tea manufacturer, behind Unilever. Jaguar Land Rover (2008) Tata Motors acquired the iconic British marques Jaguar and Land Rover from Ford in 2008 for approximately $2.3 billion, outbidding rivals including Mahindra & Mahindra. The acquisition was seen as a bold and timely move that rescued the financially distressed brands from possible collapse. It is widely regarded as a strategic success that significantly elevated Tata's global profile and brand reputation. Corus Steel (2007) Tata Steel expanded its global footprint by acquiring Anglo-Dutch steel giant Corus Group in 2007 for $11.3 billion, becoming one of the world's top ten steel producers. The acquisition was financed primarily through debt and involved a 68 per cent premium over Corus' market valuation, which later imposed a substantial financial burden on Tata Steel. Daewoo Commercial Vehicles (2004) In 2004, Tata Motors acquired the truck-manufacturing business of South Korean firm Daewoo Motors for $102 million. Daewoo Commercial Vehicle, spun off from Daewoo Motor in 2002, was the second-largest producer of heavy commercial vehicles in South Korea at the time of acquisition. The Tata Group regained ownership of Air India in 2022, 69 years after the airline was nationalised. The conglomerate pledged to transform the loss-making carrier into a 'world-class airline'. The transfer of ownership marked the culmination of the Indian government's efforts to privatise the struggling national airline. In 2021, Tata Group made strategic entries into the fast-growing ecommerce and digital health sectors. Tata Digital acquired a majority stake in online grocery platform BigBasket, followed by a controlling interest in epharmacy 1mg.
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Business Standard
20-07-2025
- Business
- Business Standard
Port Talbot's green furnace marks end of costly firefighting for Tata Steel
In July 2022, Tata Group Chairman Natarajan Chandrasekaran told the Financial Times that transition to green steelmaking hinged on the British government's support. Talks had been going on for two years, and the writing was on the wall: Without a deal within the next 12 months, the plant, Port Talbot, would close down. Port Talbot, Tata Steel's upstream steelmaking facility in South Wales, had largely been a drag on the company's bottom line since it acquired Anglo-Dutch steelmaker Corus in 2007. Government support was crucial as cash flows from the business fell short of funding the capital-intensive transition. Cut to July 14, 2025. An impassioned Chandrasekaran, while flagging off the construction of the electric arc furnace (EAF) at the plant, spoke of the ups and downs the site had faced. 'Many people, many naysayers probably thought that this day would not come. And that's why it's important,' he said. 'We got a job in hand, we got to execute. We are super committed to this project. That's why I wanted to be here today to show my personal and the Tata group's commitment.' Meltdown to makeover The EAF at Port Talbot brings the curtains down on carbon-intensive blast furnace (BF) steelmaking at the site and paves the way for low-carbon steel production. The heavy-end assets were at the end of life and carbon costs on the blast furnace process were high. The transformation, however, impacts close to 2,500 jobs, even as it secures 5,000. The BFs were decommissioned by the end of September 2024, a first on such a scale in the history of the company. Last week, as construction of the EAF kicked off, the steelworkers' union described it as a 'bittersweet' day. While it looked at it as a consequence of the devastating closure of the blast furnaces, it also acknowledged that a future for Port Talbot steelmaking was now secured. Getting to this point wasn't easy. From securing union support to navigating government negotiations, it was a web of complex stakeholder management. Years in the making The transformation to low-carbon steelmaking involves an investment of £1.25 billion. The UK government is backing the project with £500 million — the funding came through after a stretch of political churn in Westminster. Discussions for the support began under Prime Minister Boris Johnson. Till the time the deal was signed and sealed, the UK had cycled through another three prime ministers. In September 2023, Tata Steel and the Rishi Sunak-led Conservative UK government had agreed on a grant of £500 million. But in the July 2024 general elections, the Labour party landed a historic win, putting a question mark on the funding and the future of Port Talbot. The lifeline When Tata Steel acquired Corus in a £6.2 billion deal in 2007, it gained two key steelmaking sites: Port Talbot and IJmuiden in the Netherlands. The latter has been largely self-sustaining, whereas the structurally weak UK operations demanded substantial capital. Tata Steel disclosed in January 2024 that since the Corus acquisition, it had put in £6.8 billion in the UK towards improving steelmaking operations and processing sites, covering financial losses, pension restructuring costs, and providing additional capital support to service Tata Steel UK's share of debt. The closure of heavy-end assets at Port Talbot is expected to bring down the losses. The 3.2 million tonne (mt) EAF will be commissioned by the end of 2027. Downstream customers are currently being serviced with slabs from India, the Netherlands, and even the open market, reducing fixed cost. Arresting the drain The task before Tata Steel's management is clear, and the goal firmly defined. At its annual general meeting on July 2, Chandrasekaran told shareholders that the company was working towards becoming profit after tax (PAT)-positive. 'Losses in the UK will be wiped out. And going forward, this year or the next, it will become PAT-positive,' he said. The first step, however, could be to make it positive or neutral in terms of earnings before interest, tax, depreciation, and amortisation (Ebitda) this year. In FY25, UK Ebitda loss stood at £385 million. In a credit rating report dated June, Icra noted: 'Within the European operations, the UK assets were a weak link in terms of their cost position.' However, the EAF transformation will significantly improve the cost position of the UK asset and will, hence, arrest the drain in the company's consolidated earnings, it said. 'The UK operations have cost Tata Steel a lot over the years — in terms of management bandwidth and financial capital,' said Tushar Chaudhuri, research analyst, PL Capital (Prabhudas Lilladher). 'The leakage to earnings in the UK that impacted Tata Steel's consolidated balance-sheet should now stop. And the Netherlands operations are expected to perform much better this year, post the relining of the blast furnace. Over the next two quarters, Tata Steel's European operations should be Ebitda-positive.' Dutch support In the UK, Tata Steel is already on the road to decarbonisation. In the Netherlands, the plans are still in motion. The plan for the Dutch operations is to replace one of the two blast furnaces and coke ovens with direct reduced iron and EAF-based production by the end of the decade. Meanwhile, external vulnerability has prompted Tata Steel to review costs across regions as part of a transformation programme: A multi-pronged approach of maximising production efficiencies, lowering fixed costs, and optimising product mix and margins. In the Netherlands, Tata Steel plans to cut 1,200 jobs in phases as part of this exercise. But the cost-cutting drive is not just limited to the high-cost European outposts. Forging ahead Over the next 12 to 18 months, Tata Steel has set a cost takeout target of ₹11,500 crore across regions: India, the UK, and the Netherlands. In FY25, the cost takeout had stood at ₹6,600 crore versus FY24 levels across units. Rising geopolitical tensions, volatile steel prices, and impending auction of legacy iron ore mines in 2030 are among the challenges that are largely beyond Tata Steel's control. So it is focusing on what it can control — resetting its cost structure. On the cost takeout, Amit Lahoti, senior research analyst — Institutional Equities at Emkay Global, however, said, 'It is difficult to assess how much of the cost takeout will ultimately flow to the Ebitda. There are too many moving parts, such as steel prices and market conditions.' The company will also benefit from the expanded 5 mt capacity at Kalinganagar, Odisha, adding to its top and bottom line – with some of the additional volumes flowing in FY26. As things stand, the years of struggle with European business appear to be fading, new capacity is set to generate cash, and efforts to rein in expenses are gaining momentum. Could this be a new chapter in the century-old steelmakers' story?
New Indian Express
13-07-2025
- Business
- New Indian Express
Priya Nair: Pulling all the right levers
That Dalal Street has given a five-notch salute to the news of a small-town girl Priya Nair moving to the corner room of the country's largest fast moving consumer goods (FMCG) maker is less about she being the first-ever woman to lead the 92-year-old Hindustan Unilever, but more about her accomplishments during her three decades in the company. Priya's journey began in 1995 as a management trainee in the company that is also known as the 'CEO Factory' for grooming dozens of trainees into chief executives of large multinational corporations. Born in a middle class Malayalee family in the Maharashtra's sugar town of Kolhapur, Priya does not boast of a degree from the top B-schools – she graduated from Sydenham College in Bombay and then a master's in marketing from Symbiosis Management Institute in Pune (not from top tier IIMs), Nair's rise to the top itself breaks many a myth. The immediate reference points that the market is lapping up are how Priya has turned around the struggling beauty and skin care business of the Anglo-Dutch consumer goods giant in London as its president since 2023 and has made it a 13-billion-poundprofit company. Back home as the executive director of the home care division (2014-20), she helped boost the segmental profit margins from a low 13.1% to 18.8%, which also lifted HUL's overall margins from 15% to 22.3%. The market is also benchmarking her against the stellar show that Sanjiv Mehta (the CEO before the outgoing incumbent Rohit Jawa), who was instrumental in more than doubling annual sales to Rs 58,000 crore from Rs 25,000 crore, and market-cap soaring four times to over Rs 5.5 lakh crore during his five-year term ending in June 2023. Priya doing an encore is what the expectation is. Analysts and markets have already factored in her ability to do the not-so-easily-doable that too at a stellar scale. London-based Priya assumes a 5-year tenure from August 1 at a time when the company is facing slowing growth and intense competition from fast moving D2C brands and new-age players. Under the watch of the outgoing leadership, sales barely climbed 2% while the stock plunged 10%.
