The Competition Commission of India has approved Tatas’ decision to acquire up to 64.3% of BigBasket, providing the diversified company with a robust foothold within the fast-growing online grocery industry. Tata Digital Ltd (TDL) will take over 64.3 % of the entire share capital of Supermarket Grocery Supplies Pvt Ltd (SGS), also because of the sole owner of Innovative Retail Concepts Pvt Ltd, under the terms of the agreement. SGS sells B2B (business-to-business) through the online site business.bigbasket.com.
Innovative Retail Concepts Pvt Ltd (IRC) sells B2C (business-to-consumer) products online at http://www.bigbasket.com and via associated mobile apps. TDL, a wholly-owned subsidiary of Tata Sons Pvt Ltd, offers technology services within the areas of identity and access management, loyalty programs, offers, and payments.
Tatas are looking to take a position in BigBasket for several months, and therefore the proposed deal also offers an exit path for a variety of investors, including Chinese billionaire Jack Ma’s Alibaba. Consistent with a filing, the Tata group has proposed to accumulate quite 60% of the web grocery platform BigBasket, because the conglomerate seeks to expand within the fast-growing e-commerce market.
According to a filing with the Competition Commission of India (CCI), the corporate intends to accumulate up to 64.3 % of Supermarket Grocery Supplies Pvt Ltd (SGS) through a mixture of primary and secondary acquisitions. Tata Digital Ltd (TDL), SGS, and Innovative Retail Concepts Pvt Ltd (IRC) are the parties to the proposed contract, which are engaged in B2C (Business to Consumer) sales through www.bigbasket.com and related mobile applications.
According to a politician release issued on Thursday, the Competition Commission of India (CCI) has approved the proposed deal during which Tata Group will acquire up to 64.3% of Bigbasket. TDL will acquire SGS’s total share capital (on a totally diluted basis) in one or more phases through a mixture of primary and secondary acquisitions. The primary transaction has occurred.It is reported that, within the future, SGS will acquire sole control of Innovative Retail Concepts Pvt Ltd (IRC) via a separate transaction (transaction 2). Transactions 1 and a couple of are mentioned together because of the proposed mix. “The proposed combination would end in TDL acquiring a majority stake in and control over SGS, the release said.
Tata Group had agreed to pay $1.2 billion for a majority stake in BigBasket. The organization intends to take a position $200-250 million within the online grocery startup. Tata Digital is probably going to shop for out Alibaba, which owns 2.58% after BigBasket, also as Actis LLP, which owns 18 %., other small investors may imitate.
The transaction is one of the most important M&A deals in India’s digital sector. Tata is going to be in direct competition with Reliance’s Jio Mart, Amazon, Flipkart, also as SoftBank Vision Fund-backed Grofers. Founded in 2011, BigBasket operates in 25 Indian cities. BigBasket is the leader within the segment and claimed to possess crossed $1 billion annual revenue. It competes with SoftBank-backed Grofers, also as Amazon India and Flipkart. A deal beyond a particular threshold requires approval from CCI.
