Tata Group is reportedly in talks to acquire a majority stake in the Indian unit of Chinese smartphone maker, Vivo. The phone-maker has been seeking local partners as the government wants the involvement of Indian companies in its operations, manufacturing and distribution.
According to a report in Moneycontrol that quoted sources, the discussions are at an advanced stage but both the parties are yet to agree at a valuation as Vivo is seeking a higher valuation than the Tatas are offering.
Vivo’s manufacturing factory in Greater Noida, on the other hand, has been taken over by Bhagwati Products (Micromax), which has already begun hiring staff, the report added. They will start producing smartphones for Vivo through its original design manufacturing joint venture with Huaqin. The JV is awaiting approval from the government.
The factory, which has been transferred to Bhagwati, was on lease. Vivo has moved its manufacturing operations to a new 170-acre factory in Greater Noida.
The Indian government wants Indian partners to have a stake of at least 51 per cent in a potential joint venture with a Chinese handset company, with local leadership and local distribution.
Meanwhile, Vivo is under investigation for allegedly remitting large amounts of its revenue to its Chinese parent to allegedly avoid paying taxes, as well as for alleged violation of Prevention of Money Laundering Act (PMLA) by the Enforcement Directorate.