In search of synergies- Tata Steel's acquisition of Bhushan Steel

Abstract

The case describes how Tata Steel went for the acquisition of Bhushan Steel. The process of acquisition is discussed in detail. Unlike many cases which focus on the details of the M&A process, valuation parameters and the cost of acquisition, the present case attempts to understand the situation from the point of synergistic benefits that could be reaped by both the entities. It attempts to understand the various benefits that can be attained based on a good understanding of the various types of synergies that companies look forward to in an acquisition and how it can help in developing a competitive advantage. While many cases dwell on potential synergies in abstract terms, the current case tries to unfold the four major types of synergies that companies look forward to in an acquisition. It also analyses the future challenges that Tata Group would have to meet while seeking to address the question of how the company would maintain its growth in an emerging market like India in the long term.