Tata Group cancels stake acquisition in Chinese phone maker Vivo India as Apple objects deal: Report
Mumbai: The Tata Group's attempt to acquire a majority stake in Vivo's India business has faced challenges due to objections from Apple, according to a Times of India report.
Vivo, which reported a revenue of Rs 30,000 crore for the fiscal year 2023, planned to sell a 51% stake in its Indian subsidiary to the Tata Group.
This decision was part of Vivo’s strategy to align its operations more closely with Indian market expectations amid government pressures.
However, Apple, a partner of Tata whose devices are being manufactured by the Tata Group in Bangalore, opposed the deal.
The Times of India report cited a source, who said for Apple, Tata’s deal with Vivo would have meant a partnership with a competitor as Tata is its key manufacturing ally.
“We are denying this development,” a spokesperson of the Tata Group said, as quoted by the report.
Chinese companies, including Vivo, have been increasingly partnering with local Indian firms by selling controlling stakes to navigate regulatory scrutiny.
This strategy helps these companies secure funding, which has become more difficult due to heightened scrutiny of investments from countries sharing a land border with India.
Further, partnering with reputable local firms helps enhance their credibility in the 'Make in India' initiative, offering protection from regulatory actions and easing visa processes.
Similar deals have recently occurred, such as China's SAIC Group selling a majority stake in MG Motor to Sajjan Jindal’s JSW Group, and Sunil Vachani-led Dixon Electronics acquiring a 56% stake in Ismartu India, a subsidiary of Chinese Transsion Technology.
Meanwhile, the Tata Group has been strengthening its presence in the electronics sector.
Its acquisition of factories from Taiwanese Wistron, a manufacturing partner of Apple, marked a significant step, allowing Tata to enter Apple’s key supplier network and produce iPhones for both the Indian and global markets.
This partnership has enhanced Tata's scale and credibility within the global electronics manufacturing ecosystem, alongside major players like Foxconn, Pegatron, and Wistron.
It is worth noting that Vivo is currently facing regulatory scrutiny in India.
The Enforcement Directorate (ED) is investigating the company for alleged violations under the Prevention of Money Laundering Act (PMLA), accusing Vivo of defrauding the Indian government, which led to the registration of a money laundering case on February 3, 2022.
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