Tata Group is in talks to buy the battery materials business of a United Kingdom-based firm in a concerted effort to capitalise on the booming electric vehicle (EV) market in India. Tata Chemicals Ltd is currently negotiating with British battery maker and sustainable technologies company Johnson Matthey, according to a Mint report.
The Tata Group company has emerged as one of the frontrunners in taking over the battery business of the British chemicals major after the firm wanted to exit the business. The deal is expected to be valued at $500-700 million, the report added, quoting sources having knowledge of the matter.
“Johnson Matthey’s battery materials and solutions have been accepted globally for many decades, especially in geographies where Tata Motors operates,” one the sources was quoted as saying by Mint.
Tata’s acquisition of the battery business will give a further push to its EV dominance in one of the largest and fastest-growing EV markets in the world. While Tata’s EV portfolio with the likes of Nexon EV, Tigor EV and others has come to command 70.57 percent of the total sales in H1 FY 2022, the higher cost of EVs often leads to loss of customers.
By acquiring the battery business, Tata Motors will not only be able to reduce the manufacturing cost of its EVs but also create an additional source of revenue for the conglomerate. The auto manufacturer is also expected to roll out EV alternatives for trucks, commercial vehicles (CVs) and utility vehicles in the near future.
Johnson Matthey, an FTSE 100 listed company, began talks with Tatas after it announced two weeks ago that it would be exiting the segment. The company stated that supply chain disturbances, lower precious metal prices and the turbulent American labour market would make it hard to sustain operations of its battery business.
“Johnson Matthey announced on 11 November that it would be looking for a buyer for its battery materials business. We are having a number of discussions with various companies, and it is too early to comment any further on these,” Nick Laitner, a Johnson Matthey spokesperson was quoted as saying by Mint.
In January 2020, Tata Group announced that Tata Power, Tata Motors and Tata Chemicals have come together to give a push to the EV segment to build an ecosystem consisting of all facets of the operations.Internet Explorer Channel Network