Tata Group in talks to acquire a majority stake in Vivo's India unit

On June 12, a report emerged that the Centre may okay a joint venture between Indian and Chinese companies if the Indian partner holds a majority stake of at least 51 per cent in the firm

Tata Group is in talks to acquire a majority stake in the Indian unit of Chinese smartphone maker Vivo, Moneycontrol reported on Friday. The negotiations have reached an “advanced” stage, with discussions now centred around determining the valuation, the report added.

Earlier, reports emerged that Vivo has sold one of its manufacturing units located in Uttar Pradesh's Greater Noida to Bhagwati Products, the parent company of Micromax. The Indian company will begin producing phones for Vivo through its original design manufacturing joint venture with Huaqin. The factory is located at the World Trade Center, Techzone IT Park.

 

This deal awaits the Centre’s nod.

Conditions for India-China joint ventures

On June 12, The Economic Times reported that the Centre may approve a joint venture between Indian and Chinese companies if the Indian partner holds a majority stake of at least 51 per cent in the local unit.

Due to the India-China border tensions, the Centre issued strict regulations in 2020, mandating companies in neighbouring countries (sharing a border with India) to obtain government clearance before investing.

This move had put several potential projects on hold. However, in a sign of a shift in stance, the Centre’s accommodating approach may now result in materialising these collaboration projects while protecting India’s interests.

Money laundering case against Vivo

Notably, the Chinese smartphone maker is facing increased regulatory pressure from the Centre. The company is under the Enforcement Directorate scanner concerning a Prevention of Money Laundering Act (PMLA) case. The ED has accused Vivo of allegedly cheating the Government of India, for which a money laundering case was registered by the probe agency on February 3, 2022.