INDIA – Tata Group’s talk, which had reached an advanced stage for a potential takeover of one of India’s largest bottled water makers, Bisleri International Pvt, has hit a snag over valuation indifferences, people familiar with the matter told ET Retail.
Talks between Tata and Ramesh Chauhan, the owner of Bisleri, have been going on for two years now. Ramesh made up his mind after meeting Tata Sons chairman N. Chandrasekaran and Tata Consumer CEO Sunil D’Souza a few months back.
However, negotiations have stalled as the companies were unable to agree on a valuation, said the people, who asked not to be identified as the information is private.
Bisleri’s owners were looking to raise about US$1 billion from a deal, the people said. (Valuation of Tata Group was not disclosed).
Ramesh had no intention of running the company any further and, after the acquisition, he had planned to invest in environmental and charitable causes.
The people said that discussions between Tata and Bisleri could still resume, and other potential suitors may emerge.
If Tata group acquires the company, it would be a new avenue for its business growth market, as the bottled water market in India valued at US$2,970.61 million in 2021, is projected to reach US$8923.84 million by 2029, exhibiting a CAGR of 13% during the forecast period (2022-2029).
In addition, Bisleri International has also expanded its market reach internationally and across other markets in the Middle East with a manufacturing and bottling pact with the Dubai-based diversified Nasser Abdulla Lootah group.
In the agreement, the manufacturing and bottling will be under the flagship of Emirates Drinking Water, which is part of the Nasser Abdulla Lootah Group of Companies in the region, at its plants in Dubai.
The company will also sell the brands in Dubai, Sharjah, and Abu Dhabi in mass-premium general and modern trade stores, hotels, and restaurants, and via e-commerce platforms.
The operations and productions will begin in April 2023. Bisleri–mineral water and Vedica–the Himalayan Spring Water will be available in 500ml and 1.5ltrs.
The production and marketing association will help strengthen Bisleri International’s presence across the UAE, where the bottled market is displaying significant growth projections.
The fact that it could only be Tata going for the bottled water maker, since Reliance Industries, Danone, and Nestle have not made a bold move in the acquisition discussions, a heated debate has taken a center stage in India.
Some analysts credit that the acquisition can saddle Tata Consumer Products with sizeable debt and place the company in a market segment marked by thin margins, intense competition, and minimal pricing power.
Others argue that amid intense local competition, counterfeits, and low pricing power, Bisleri may fail to boost Tata Consumer’s profitability.
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