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The Competition Commission of India has given its approval to Tata group to acquire 64.3 per cent stake in bigbasket. The acquisition will be by done by Tata Digital, which is spearheading the Group’s e-commerce push.
Tata Digital will acquire up to 64.3 per cent of the total share capital of Supermarket Grocery Supplies Private Ltd (SGS) and SGS’ sole control over Innovative Retail Concepts Private Limited that operates bigbasket.
While the deal would help Tatas compete with retail giants such as Reliance Retail, Flipkart and Amazon, it would also mark the exit of Alibaba from bigbasket. This is part of the Tata plan to launch a super app offering multiple products and services.
The Tata Group will be hoping to strengthen its farm-to-fork strategy in the food and retail segment with the proposed acquisition of online grocery firm bigbasket.
According to experts, the acquisition could help both the companies upsell, cross-sell and leverage each other’s customer database. On an industry level, Tata’s expansion in the retail sector would lead to faster consolidations for other brands too.
The proposal involves acquisition by Tata Digital of up to 64.3 per cent of the total share capital of SGS (on a fully diluted basis) through a combination of primary and secondary acquisitions, in one or more series of steps (Transaction 1).
It is stated that subsequently, through a separate transaction, SGS may acquire sole control over Innovative Retail Concepts Private Limited (IRC) (Transaction 2). Transaction 1 and Transaction 2 are collectively referred to as the Proposed Combination. The Proposed Combination will result in the acquisition by Tata Digital of majority stake and control over SGS, an official release said.
SGS is incorporated under the laws of India and is engaged in online B2B sales of the Relevant Products in India through business.bigbasket.com.
Innovative Retail Concepts is incorporated under the laws of India and engaged in online B2C sales of the Relevant Products in India and operates the website bigbasket.com and related mobile applications, the release added.
Tata Digital is a wholly-owned subsidiary of Tata Sons Private Limited (Tata Sons), which is the holding company of the entities belonging to the Tata Sons group. At present, Tata Digital is engaged in the business of providing technology services related to identity & access management, loyalty programme, offers and payments. The Tata Sons group, through its group entities, is engaged, inter alia, in the business of: (a) business-to business (B2B) sale of food and grocery, household products and personal and beauty care products (Relevant Products) in India; (b) business-to consumer (B2C) sale of Relevant Products in India; and (c) manufacturing and sale of certain packaged food and grocery products in India.
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