According to people acquainted with the situation, the Tata Group has allegedly undertaken advanced talks to purchase a majority stake in the Indian division of the Chinese smartphone manufacturer Vivo, which is controlled by the BBK Group.
Though a formal agreement has not yet been reached, significant progress has been made in the negotiations, which have focused on valuations.
Tata Group To Purchase Majority Stake in Vivo
According to sources, Vivo is looking for a valuation that is greater than what the Tata Group is now willing to give.
Within the Tata Group, there is still a lot of interest in the possible acquisition despite differences in price.
Vivo has been under scrutiny by Indian authorities for possible tax evasion and PMLA (Prevention of Money Laundering) offenses.
It has also been claimed that Oppo, another smartphone brand owned by China’s BBK Group, is in talks with local companies to sell its Indian division.
The Indian government has expressed a wish to see at least a 51 percent domestic stake held in any joint venture between an Indian partner and a Chinese smartphone business.
Local Leadership and Distribution To Be A Part of The Joint Venture
The government has further mandated that local leadership and distribution be part of the joint venture.
Bhagwati Products, the firm behind the Micromax brand, has acquired Vivo’s manufacturing facility in Greater Noida.
With the government’s clearance still pending, Bhagwati Products’ original design manufacturing joint venture with Huaqin will shortly start manufacturing smartphones for Vivo. The company has already begun hiring people.
The manufacturing division of Vivo has moved to a new, 170-acre facility in Greater Noida.
The Tata Group’s desire to take over the majority of Vivo India is consistent with its overarching plan to increase its market share in the electronics manufacturing industry.
The Taiwanese electronics giant Wistron’s Indian operations were previously acquired by the Tata Group.
According to reports, the Tata Group is also in negotiations to acquire a majority share in Apple’s contract manufacturer Pegatron for its iPhone production facility located near Chennai.
