Tata Group opts for JVs in China
domain-b.com — November 7, 2007

Tata Group's expansion plans for China, which are more likely see joint ventures and own start-ups, rather than mergers and acquisitions, is based on its internal cultural and corporate governance issues.

Reportedly, corporate governance concerns, high asset prices and regulatory blocks are the primary reasons why joint ventures are the best way to go to China for the Group, according to Alan Rosling, executive director at Tata Sons, the holding company of the Tata Group.

According to Rosling, the Tata Group is increasing its emphasis on China as part of its strategy. He says that like in 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."

Group companies Tata Steel operates finishing plants in China, while Tata Motors sources automotive components from the land of the Dragon. According to Rosling, a number of things are possible in China, which do not need M&As.

This fiscal, the Tata Group would earn more on foreign shores than domestically in India, mainly on account of the $12.9 billion deal between Tata Steel and Anglo-Dutch steel maker, Corus.

According to Rosling, the Group is now looking to strike a balance between M&A's abroad, and investing more in its core market, India, where opportunities abound.