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Why Did Apple Object to Tata Group Acquiring Stake in Vivos India Business?

Why Did Apple Object to Tata Group Acquiring Stake in Vivo's India Business?

Tata Group’s Vivo Acquisition Plans Derailed by Apple Objections

New Delhi, India – The Tata Group’s ambition to acquire a majority stake in Vivo’s India business has hit an unexpected roadblock, thanks to objections from Apple. According to sources familiar with the situation, negotiations were affected by Apple’s concerns about the deal. This has cast significant doubt on the potential partnership between Tata Group and Vivo.

Background of the Deal

Vivo, a major Chinese smartphone manufacturer, has been exploring ways to ‘Indianise’ its operations amid growing governmental pressure. The company was seeking to offload a 51% stake in its Indian arm, a move expected to align with India’s ‘Make in India’ initiative. Sources indicate that Vivo generated revenue of Rs 30,000 crore in the fiscal year 2023. However, this promising transaction has come to an abrupt halt.

Apple’s Concerns

Apple’s interference in this deal stems from its existing relationship with Tata Group. Tata has been a crucial manufacturing partner for Apple, producing devices in Bangalore. The iPhone maker viewed a possible Tata-Vivo partnership as a collaboration with a competitor, which was not acceptable to them. This concern prompted Apple to place significant pressure on Tata Group to reconsider its plans, leading to the stalling of negotiations.

As a source explained, “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.”

Official Responses

A questionnaire seeking comments from Apple and Vivo did not receive any replies. However, a spokesperson for the Tata Group outright denied the development, indicating a possible unwillingness to acknowledge the stalling talks publicly.

‘Make in India’ and Local Partnerships

Chinese companies, including Vivo, are increasingly looking to partner with local entities to stabilize their operations in India. These partnerships help Chinese companies navigate the stringent investor scrutiny stemming from border tensions between India and China. Additionally, having a credible local partner can make it easier to secure funding and mitigate regulatory challenges.

For instance, another Chinese company, SAIC, recently opted to sell majority control of MG Motor to India’s JSW Group. Similarly, Dixon Electronics, led by Sunil Vachani, acquired a 56% stake in Ismartu India, a subsidiary of Transsion Technology, further showcasing this trend.

Tata’s Expanding Electronics Portfolio

Over recent years, Tata Group has been making significant strides in the electronics industry. A major milestone was its takeover of Wistron’s factories, an established partner for Apple. This move allowed Tata to enter Apple’s exclusive global supplier network, a win that bolstered its standing in the competitive electronics market dominated by giants like Foxconn, Pegatron, and Wistron.

The association with Apple not only provided Tata the ability to manufacture iPhones for the local and global markets but also enhanced its credibility. This strong foothold in the electronics ecosystem meant that any potential partnership with a competitor, like Vivo, would raise concerns for Apple.

The Road Ahead

Current conditions suggest a “re-think looks highly unlikely ‘as of now,” citing sources close to the situation. With Apple maintaining a tight hold over its relationships and ensuring that its business interests are protected, it seems unlikely that Tata will be able to proceed with the acquisition of a stake in Vivo’s Indian subsidiary anytime soon.

While the turn of events may result in missed opportunities for Tata Group, it underscores the complexities and competing interests in the fast-evolving electronics manufacturing landscape. For now, both Vivo and Tata will need to revisit their strategies and possible future partnerships to align with their individual and collective business trajectories.

Conclusion

The intersection of global business interests often involves complicated negotiations and close scrutiny of potential partnerships. In the case of Tata Group and Vivo, Apple’s influence underscores the intricacy of maintaining key alliances while navigating new opportunities. As these titans of the tech industry reconsider their futures, we will closely watch their next moves in this vibrant and competitive market.

also read:vivos Partnership with UEFA Euro 2024: Elevating Football with Cutting-Edge Technology

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