The Competition Commission of India (CCI) has approved Tata Digital's acquisition of 64.3 per cent of BigBasket's B2B arm Supermarket Grocery Supplies. The commission said Supermarket Grocery Supplies may acquire sole control of Innovative Retail Concepts that operates BigBasket's online retail unit. The wholly-owned subsidiary of Tata Sons had sought the CCI's approval for the acquisition through a mix of primary and secondary share purchase. This approval sets the stage for the impending battle of the giants in the country's grocery segment that has players like Flipkart and Amazon Fresh.
"The Competition Commission of India (CCI) approves acquisition by Tata Digital Limited of up to 64.3% of the total share capital of Supermarket Grocery Supplies Private Ltd (SGS) and SGS' sole control over Innovative Retail Concepts Private Limited. The proposed combination involves acquisition by Tata Digital Limited (TDL) of up to 64.3% 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 (Transaction 1). It is stated that subsequently, through a separate transaction, SGS may acquire sole control over Innovative Retail Concepts Private Limited (IRC) (Transaction 2). Transaction 1 and Transaction 2 are collectively referred to as the Proposed Combination. The Proposed Combination will result in the acquisition by TDL of majority stake of and control over SGS," stated the CCI statement.
Tata Group had finalised a $1.2 billion deal to acquire a majority stake in BigBasket. The company would infuse $200-250 million out of that into the online grocery startup. Tata Digital is likely to buy out Alibaba that holds 2.58 per cent stake, and Actis LLP that owns 18.05 per cent stake in BigBasket. Some other small investors might also get out.
The transaction is one of the biggest M&A deals in India's digital sector. Tata will be in direct competition with Reliance's Jio Mart, Amazon, Flipkart, as well as SoftBank Vision Fund-backed Grofers.
BigBasket is the leader in the segment and claimed to have crossed $1 billion annual revenue.