CCI approves Tata Digital’s acquisition of BigBasket parent SGS
03 May 2021
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The Competition Commission of India (CCI) has approved Tata Digital Limited’s acquisition of up to 64.3 per cent of the total share capital of the parent company of Big Basket grocery chain Supermarket Grocery Supplies Private Ltd (SGS) and SGS’ sole control over Innovative Retail Concepts Private Limited.
Tata Group had entered into a deal to acquire BigBasket, in a deal valued at over $1 billion, as part of the groups decision to enter the consumer related business sectors in a big way.
The deal marks Tata Group’s first major step towards its plan of setting up a “super-app”. While the company has significant presence in several other retail segments like electronics, fashion, and even an e-commerce portal TataCliq, it is yet to enter the online grocery segment.
For BigBasket, it will provide the necessary firepower to compete against the latest entrants in the e-grocery segment such as Reliance, Amazon and Walmart-owned Flipkart. Besides, there is also a sebmenyt of smaller players such as Softbank-backed Grofers, Milkbasket, CountryDelight, Godrej Nature’s Basket, Easyday are also present in the sector.
BigBasket’s CEO Hari Menon is expected to continue in his role after the acquisition.
The proposed combination involves acquisition by Tata Digital Limited (TDL) 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.
Further, it is stated that subsequently, through a separate transaction, SGS may acquire sole control over Innovative Retail Concepts Private Limited (IRC). The two transactions, collectively referred to as the proposed combination, will result in TDL’s acquisition of majority stake of and control over SGS.
TDL is a wholly owned subsidiary of Tata Sons Private Limited, the ultimate holding company of the entities belonging to the Tata Sons group. At present, TDL is engaged in the business of providing technology services related to identity and access management, loyalty programme, offers and payments.
Tata Sons, through its group entities, is engaged, inter alia, in the business of business-to business (B2B) sale of food and grocery, household products and personal and beauty care products in India; business-to consumer (B2C) sale of Relevant Products in India; and manufacturing and sale of certain packaged food and grocery products in India.
SGS, incorporated in India, is engaged in online B2B sales of the relevant products in India through online grocery business, BigBasket.com.
IRC is engaged in online B2C sales of relevant products in India and operates the website www.bigbasket.com and related mobile applications.
