New Delhi, Jul 31 2024 : The Tata Group has scrapped its plan to acquire a 51% stake in Vivo’s Indian subsidiary due to objections from Apple, according to a report by The Times of India.
Vivo, which reported a revenue of Rs 30,000 crore for FY23, had aimed to sell a majority stake in its Indian operations to Tata as part of its strategy to localize its business in response to government pressure. However, the deal faced significant hurdles because Apple, which currently has its devices manufactured by Tata in Bangalore, opposed the transaction.
The report cites a source stating, “Apple’s objection was a crucial factor in halting the deal. For Apple, Tata’s potential partnership with Vivo would mean a conflict of interest with a competitor, leading to the breakdown of negotiations.”
The Tata Group has denied the claims, stating, “We are denying this development.”
Chinese firms are increasingly partnering with local companies in India to navigate government scrutiny and enhance their standing in the ‘Make in India’ initiative. Recent examples include SAIC Group’s sale of a majority stake in MG Motor to Sajjan Jindal’s JSW Group, and Dixon Electronics’ acquisition of a 56% stake in Ismartu India from Chinese Transsion Technology.
Meanwhile, Tata Group continues to bolster its presence in the electronics sector with its recent acquisition of Taiwanese Wistron’s factories, allowing Tata to join Apple’s key supplier network.
In addition, Vivo is under investigation by the Enforcement Directorate (ED) for alleged money laundering, with the case registered under the Prevention of Money Laundering Act (PMLA). The ED accuses Vivo of defrauding the Indian government, a matter which adds to the ongoing regulatory challenges faced by the company.
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