Walmart Inc. is in talks with the Tata group for a major stake acquisition in the salt-to-software conglomerate’s planned mega app, two individuals aware of the development said. The ‘mega app’ intends to create a behemoth of digital platforms providing a large variety of items in the retail room.
Tata Group is in negotiations with Walmart for a deal involving Walmart’s strategic involvement in the business of mega app platforms. Eventually, the Walmart investment could cross $20-25 billion for a significant stake in the planned mega app to be hosted under a subsidiary of Tata Sons, said one of the two individuals on condition of anonymity.
If the transaction succeeds, it will be the largest acquisition in the retail space ever made by the country, eclipsing Walmart’s own purchase of a 66 percent stake in Flipkart for $16 billion in May 2018.
The super app could be launched as a joint venture between Tata and Walmart, as per the ongoing discussions between Tata and Walmart, which will allow synergies between Tata’s e-commerce company and Flipkart to be leveraged.
The super app through include Walmart’s Flipkart products and the entire retail product franchise housed by the Tata group on one retail customer platform. And Flipkart, on the other hand, could be driven by Tata,’ said the first guy.
The new digital platform company is proposed to be run jointly by Tata-Walmart, according to the ongoing talks, and more international investors could be roped in as investors.
For the planned deal, Goldman Sachs has been named by Walmart as the investment banker, one of the individuals said on condition of anonymity.
“The super-app valuation is projected to be about $50 -60 billion,” the second individual said.
The mega app, scheduled to be launched in India in December or January, will bring together the different consumer businesses of Tata under one channel, providing healthcare, food and grocery ordering, insurance and financial services, including fashion , lifestyle, electronics, over-the-top services, education and bill payments, etc.
“Walmart wants a strong brand to help its e-commerce business, while Tata Group wants a global name and an existing player in the online space to increase sales of goods currently sold through the retail subsidiaries and online platforms of Tata Group to be able to compete against Jio Platforms and Amazon of Reliance Industries,” said the second person.
Tata Group has the biggest franchise of its own branded goods that are marketed to retail clients, compared to Jio Platforms or Amazon.
Tata Cliq, StarQuik, Tata Sky, and Croma are the e-commerce sites of the Tata group for selling different retail goods. The super app company’s promoter organisation would have all the Tata group’s retail companies consolidated into one channel.
Tea, coffee, water, salt, lentils, spices, ready to eat goods, sweeteners, etc. are sold by Tata Consumer Products. From Titan Co. Fashion accessories such as watches, jewelry and eyewear are manufactured and retailed by Ltd.
Westside runs Tata’s clothing and accessories arm Trent and Tata unit Landmark is a bookstore chain.
Tata AutoComp systems, Cromā (a retail chain for consumer electronics and durable goods with approximately 500 Croma branded products), Tata Swach, Magadi Soda Co., Advinus Therapeutics, Casa Décor and Tata Ceramics, among others, are other consumer-facing firms.
