The recent acquisition of Daewoo Commercial by Tata Motors has gained recognition for Daewoo and has enabled the company to improve its image of a third world company operating in a near first world economic environment.In line with the move of Indian companies acquiring foreign companies and embracing globalization, Tata Motors is not far behind. On February 18, 2004, Tata Motors signed an agreement for acquiring Daewoo Commercial Vehicle Company Ltd. (DWCV), the second largest truck maker in Korea, for about $102 mn (Rs. 465 cr). This acquisition by Tata Motors is significant, in the sense it can open up a new frontier for the Indian automobile sector. From the Tata Group, this is the second major acquisition after it acquired Tetley Tea of UK. "Tata Motors can make a mark in the global arena by being flexible and smart—that is how they have managed to achieve so much already.

Tata thinks differently from the rest of the industry—it gets around conventional thinking by taking a different approach", says Graeme Maxton, Economist and Co-founder, Autopolis. The deal is the latest in the series of sales of Korean companies, since the 1997-98 Asian financial crisis. The day the agreement was announced, the shares of Tata Motors ended up by 0.8% at Rs. 563.25 at its highest close in a decade on the Bombay Stock Exchange. Tata Motors is planning to finance the acquisition equally through Tata Motors' equity in the Korean company and through loans from banks to DWCV. Tata Motors will tap foreign banks to lend $51 mn to DWCV to pay off the existing creditors and shareholders of DWCV, making it a 100% subsidiary of Tata Motors.