Acquisitions Of Tata Consultancy Services

1.0 Introduction:
As globalization pushes the limits of business success and the businesses get more aggressive and competitive than they ever were before, the management has to deal with a lot of issues, effectively to decrease costs and improve their services. There has been a trend recently of primarily national companies to extend their global services in order to gain a competitive edge. This mostly takes place in form of mergers and acquisitions today. The reasons for this are as follows:
i. They are quicker to execute than green-field investments.
ii. Firms are acquired as they have valuable assets like brand loyalty, CRM or production systems.
iii. Firms make acquisitions as they could increase efficiency of the unit by transferring capital, technology or management skills (Hill, 2007).

An acquisition, also known as a takeover, is the buying of one company (the ‘target’) by another. An acquisition may be friendly or hostile. In the former case, the companies cooperate in negotiations; in the latter case, the takeover target is unwilling to be bought or the target's board has no prior knowledge of the offer. Acquisition usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger or longer established company and keep its name for the combined entity. This is known as a reverse takeover. Acquisitions seem to offer firms a short cut to their strategic objectives, but the process has its costs.

When the German automobile company Daimler-Benz decided it needed a bigger presence in the U.S automobile market, it did not increase that presence by building new factories to serve the United States, a process that would have taken years. Instead, it acquired the number three U.S automobile company, Chrysler, and merged the two operations to form DaimlerChrysler.
(Hill, 2007)

Acquisitions also have strategies like backward, forward, and horizontal integration. In backward...