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The Tata Group-BigBasket Potential Deal

The Tata Group-BigBasket Potential Deal
Case Code: CLBS164
Case Length: 7 Pages
Period: 2020-21
Pub Date: 2020
Teaching Note: Available
Price: Rs.200
Organization: Tata Group
Industry: Diversified
Countries: India
Themes: Competitive Strategy, Business Environment Competitor Analysis, Digital Ecosystem,
The Tata Group-BigBasket Potential Deal

Abstract

The case “The Tata Group-BigBasket Potential Deal” talks about the Tata Group eyeing a stake in online food and grocery store BigBasket.The case gives an overview of the various Tata Group businesses and the revenues by segment.It then givesa brief history of BigBasket.The case also covers the advantages of the potential deal for both the Tata Group and BigBasket.With this deal, the Tata Group was expected to get a foothold in the online grocery market while BigBasket would be able to expand its business in India. The case also touches upon the level of competition in the Indian online grocery market and how the competition is set to intensify with the entry of the Tata Group.

Issues

  • Understand the Indian online grocery market.
  • How M&As help a company to diversify its business.
  • Why companies go in for diversification.
  • Why fierce competition in a market is good for customers.

Introduction

In December 2020, the Tata Group, the Indian multinational conglomerate, announced that it was planning to acquire around a 70% stake in online food and grocery store BigBasket with an investment of US$ 940 million-US$ 950 million, and a majority stake in India-based online pharmacy network, 1mg, with an investment of US$ 250 million. Initially, in October 2020, the Group had announced its plans to acquire a 51% stake in BigBasket. The proposed deal between the Tata Group and BigBasket would not only be beneficial for the Tata Group but would also facilitate BigBasket’s entry into other segments and for it to get fresh investments. This deal would also lead to both the Tata Group and BigBasket cross-selling their products on each other’s platform..

Keywords

Online Grocery; M&As; Diversification; Competition; Competitive Advantage; Types of M&As; Online Grocery Market; Horizontal M&A; Vertical M&A; Concentric M&A; Conglomerate M&A; Value Chain Bigbasket; Tata Group; Super App

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