Summary of – Corporate restructuring at Tata Steel Ltd
Document Type
Article
Abstract
Increasing competition in product and capital markets has pressured managers to become more cost-competitive. To address their firms' uncompetitive cost structures, managers may have to consider dramatically restructuring their businesses. During 2014–2017, Tata Steel Ltd (TSL) UK considered a series of divestitures and a merger plan to nurse the company back to health. The case considers the economics of the restructuring plan. The case is designed to help students analyse a corporate downsizing program undertaken by a large Indian company in the UK and to highlight the dynamic role of the CFO and governance issues in family firms.
It introduces students to issues surrounding a typical restructuring and provides students a platform to practice the estimation of value creation in a restructuring exercise. While some cases on corporate restructuring in the context of developed economies are available, there are very few cases written in an emerging market context. This case bridges that gap.
The case was developed from secondary sources and interviews with a security analyst. The secondary sources include company annual reports, news reports, analyst reports, industry reports, company websites, stock exchange websites and databases such as Bloomberg and CMIE Prowess.
Results and Discoveries
TSL presents a unique opportunity to study corporate restructuring necessitated by a failed cross-border acquisition. It illustrates the potential for value loss in large, cross-border acquisitions. It shows how managerial hubris can prompt family firm owners to overbid in acquisitions and create legacy hot spots. In addition, the case can be used to discuss the causes of governance failures such as weak institutional monitoring and poor legal enforcement in emerging markets that could potentially harm minority shareholders.
Citation to the base paper:
S.R., V. and M., D.P. (2024), "Corporate restructuring at Tata Steel Ltd", , Vol. 20 No. 3, pp. 670-697. https://doi.org/10.1108/TCJ-04-2023-0060
Publication Date
2024
Recommended Citation
S.R., V. and M., D.P. (2024), "Corporate restructuring at Tata Steel Ltd", , Vol. 20 No. 3, pp. 670-697. https://doi.org/10.1108/TCJ-04-2023-0060
Publication Date
2024
Recommended Citation
S.R, Vishwanatha and Prasad M, Durga, "Summary of – Corporate restructuring at Tata Steel Ltd" (2024). Open Access archive. 9384.
https://impressions.manipal.edu/open-access-archive/9384
