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Bisleri-Tata Group Deal Brings A Halt Over Valuation Disagreement

Tata Group has talked for a majority stake in one of India’s largest bottled water manufacturers- the Bisleri Group, which has stalled overvaluation. It has been revealed by the people familiar with the matter.

Sources have stated that the Indian conglomerate is on the verge of talks to take control of Bisleri and both parties were continuing to finalize the structure of the transaction. They have even revealed that the Bisleri owners were planning to acquire 1 billion USD from the agreement. The negotiations later were brought to a halt because the parties were unable to agree on a valuation. The sources have maintained their anonymity about the matter.

They have revealed that the negotiations between Tata and Bisleri could resume and other competitors may arise during the period. The spokesperson for Tata and bisleri have denied commenting on the matter.

Bisleri was started in 1949 when Shri Jayantilal Chauhan founded the soft drink manufacturing company named the parle Group. The latter acquired Bisleri from an Italian entrepreneur in 1969. The data has been mentioned on the company’s website. It even states that the company holds a 60 percent share in India’s bottled mineral water market. The company deals with hand sanitizer.

Bisleri was in talks to share its stakes with the Tata Group. It has been shared by Ramesh Chauhan, the chairman of the company in an interview in November.

With their stakes in Bisleri, Tata will have tremendous influence over the packaged drinking water market, including the entry-level, mid-range, and premium water classes. They will have a market network in retail outlets, which includes water networks, chemist stores, institutional channels, hotels, restaurants, airports, and bulk water delivery because it is one of the most well-known water brands in the channels.

The Tata group has made a proposal to buy a stake in the biggest packaged water company in India. The three company executives are currently aware of the negotiations.

Given that Bisleri has established itself as a leading brand over the years, the acquisition would give Tata a foothold in packaged drinking water on a variety of levels.

Bisleri

The Tata Consumer division of the Tata Group has investigated strategic acquisitions. In addition to running the renowned coffee chain, Starbucks cafes, already own Tetley Tea, Eight O’clock coffee, Soulful cereals, pulses, and salts. Currently, Tata is seeking inorganic growth, which will play a role in its growth strategy.

Additionally, according to Sunil D’Souza, the CEO, the Tata Group already operates its own bottled water company called NourishCo. But that could be a niche market.

In India, Bisleri operates more than 150 manufacturing facilities, more than 4,000 distributors, and 5,000 trucks. The information was taken from its website. Bisleri has supplied premium Vedica Himalayan spring water in addition to being a distributor of packaged mineral water. In addition, it sells a variety of carbonated beverages like Limonata, Spicy, and soda and fruit drinks.

In order to deliver goods directly to customers, Bisleri operates an application called Bisleri@Doorstep.
The management has stated that they are working ahead of schedule and have to reach 5000 crores INR in the next few years.

Bisleri has other suitors than the Tata Group:

Reliance Retail, which is aggressively upping its game across diverse categories like beverages, food, and several other personal care brands by buying stakes from the respective companies, has made proposals to Bisleri, a legacy company that has received interest from other businesses.

Despite having demonstrated a strong interest in doing so, Reliance’s attempt to buy stakes in Bisleri International did not succeed.

In 2002–2003, Chauhan showed a strong desire to work with the multinational corporations Nestle and Danone. Both multinational corporations have shown a strong desire to up their game. Their plans, however, did not move forward.

The packaged drinking water market is highly competitive in India. Many prominent brands like Pepsico’s Aquafina, and Coca-Cola Kinley have taken up a large position in the market.

In 2020-21, the Indian bottled water industry was valued at 2.43 billion USD by a legal market research firm. It was predicted that the industry would expand at 13.25 percent by increasing disposable income, and increasing hygiene and health awareness among individuals. As of now, the shares of Tata Consumer Products have stayed stable at 715.20 INR on the BSE.

Edited by Prakriti Arora

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