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Tata Group Looks To Acquire 49% Stake In Walmart’s Indian B2B Biz

Tata Group Looks To Acquire 49% Stake In Walmart’s Indian B2B Biz

Tata is looking to buy 49% stake in Walmart’s Indian wholesale cash-and-carry operations

Earlier Tata group’s discussions with Walmart reached to a possibility of a joint venture

The deal will help Tata Group to enter into India’s cash-and-carry business

Indian multinational conglomerate, Tata Group, is reportedly in talks to acquire a 49% stake of the US-based retailer Walmart’s Indian wholesale cash-and-carry operations.

According to ET, Judith McKenna, president and CEO of Walmart International, was expected to announce this transaction during his recent visit to Delhi. However, McKenna avoided any such announcement as the deal wasn’t finalised, according to ET.

Moreover, with Cyrus Mistry taking over as the chairman of Tata Sons, which was reinstated by a recent order from the National Company Law Appellate Tribunal (NCLAT), the transaction might be further slowed down because of the uncertainties within the Tata Group.

According to the media report, Tata group’s discussions with Walmart, earlier in 2019, even reached to the possibility of a joint venture.

As of now, Walmart operates close to 28 retail stores under the brand name ‘Best Price’ across the country. Last year, the company has also invested in ecommerce major Flipkart for a majority stake.

Recently, to continue its focus on India and ensuring deeper access to the B2B market, Walmart tied up with HDFC Bank to launch a co-branded credit card exclusively for members of its Best Price Modern Wholesale “B2B Cash and Carry” stores.

Inc42 has reached out to Walmart for conformation of this deal. The story will be updated if and when they reply.

What’s There For Walmart, Tata Group In This Deal

The deal is expected to help Walmart to grow faster in the organised Indian B2B space with Tata Group’s presence in the country. According to government norms, foreign companies can invest 100% FDI in the wholesale cash-and-carry business in India.

It was in 2007 when Walmart entered India with its cash and carry business. At that time, the retail giant has partnered with Bharti Enterprises. However, in 2013 both Walmart and Bharti had called off their partnership.

On the other hand, the deal will help the Tata Group to enter into India’s cash-and-carry business. It will also present an opportunity for the Tata Group to expand its presence in India’s retail segment.

India’s retail segment is dominated by the likes of Future Group’s Big Bazaar, Germany-based Metro AG, Mukesh Ambani backed Reliance Retail, among others. However, with Walmart partnering with Tata Group, the dynamics of this industry could take a major shift.