NEW DELHI: Tata group‘s bid to acquire a majority stake in Chinese smartphone giant Vivo’s India business may have stalled after objections by Apple, sources told TOI.
Sources said Vivo (FY23 revenue: Rs 30,000 crore) was looking to offload 51% stake in its Indian subsidiary to the Tata group as part of its efforts to ‘Indianise’ operations in the face of govt pressure.
However, Apple was not comfortable with the transaction as its devices are being manufactured by the Tata group in Bangalore. “This has been one of the key reasons that scuttled the plan,” a source said. “For Apple, any deal of the Tata group, its key manufacturing ally, with Vivo would have meant a partnership with a competitor. This perhaps led to the talks breaking down between Tatas and Vivo,” the source said, adding that a “re-think looks highly unlikely ‘as of now’.”
A questionnaire sent to Apple and Vivo didn’t elicit any response. A spokesperson for the Tata group said, “We are denying this development.”
Chinese companies have been looking at inducting local partners in their operations here by selling controlling stakes, a decision that helps them get easier access to funding, which has increasingly become difficult after the govt’s heightened scrutiny on investments emanating from countries that share land border with India. Also, having a credible local partner in their business helps them emerge as trusted partners in the govt’s Make in India initiative, which many feel insulates them from regulatory actions and helps them get easier access to visas.
China’s SAIC group, the owner of MG Motor, recently decided to sell majority control to Sajjan Jindal’s JSW group, while Sunil Vachani-led Dixon Electronics also struck a deal to buy 56% stake in Ismartu India (a subsidiary of Chinese Transsion Technology, which has brands, such as iTel, Infinix, and Tecno).
The Tata group has been expanding aggressively in the electronics space. Its takeover of Apple’s manufacturing partner Taiwanese Wistron’s factories was a big win for the company as it was able to break into US electronics giant’s key supplier ecosystem.
With the Apple contract, Tata group not only got a chance to make iPhones meant for sale in India, but also got an opportunity to make for global markets. It gained scale with one of the world’s most lucrative smartphone seller. The partnership also gave it credibility in ecosystem of global electronics manufacturers, dominated by likes of Taiwanese Foxconn, Pegatron and Wistron.
Sources said Vivo (FY23 revenue: Rs 30,000 crore) was looking to offload 51% stake in its Indian subsidiary to the Tata group as part of its efforts to ‘Indianise’ operations in the face of govt pressure.
However, Apple was not comfortable with the transaction as its devices are being manufactured by the Tata group in Bangalore. “This has been one of the key reasons that scuttled the plan,” a source said. “For Apple, any deal of the Tata group, its key manufacturing ally, with Vivo would have meant a partnership with a competitor. This perhaps led to the talks breaking down between Tatas and Vivo,” the source said, adding that a “re-think looks highly unlikely ‘as of now’.”
A questionnaire sent to Apple and Vivo didn’t elicit any response. A spokesperson for the Tata group said, “We are denying this development.”
Chinese companies have been looking at inducting local partners in their operations here by selling controlling stakes, a decision that helps them get easier access to funding, which has increasingly become difficult after the govt’s heightened scrutiny on investments emanating from countries that share land border with India. Also, having a credible local partner in their business helps them emerge as trusted partners in the govt’s Make in India initiative, which many feel insulates them from regulatory actions and helps them get easier access to visas.
China’s SAIC group, the owner of MG Motor, recently decided to sell majority control to Sajjan Jindal’s JSW group, while Sunil Vachani-led Dixon Electronics also struck a deal to buy 56% stake in Ismartu India (a subsidiary of Chinese Transsion Technology, which has brands, such as iTel, Infinix, and Tecno).
The Tata group has been expanding aggressively in the electronics space. Its takeover of Apple’s manufacturing partner Taiwanese Wistron’s factories was a big win for the company as it was able to break into US electronics giant’s key supplier ecosystem.
With the Apple contract, Tata group not only got a chance to make iPhones meant for sale in India, but also got an opportunity to make for global markets. It gained scale with one of the world’s most lucrative smartphone seller. The partnership also gave it credibility in ecosystem of global electronics manufacturers, dominated by likes of Taiwanese Foxconn, Pegatron and Wistron.