Industry

Samara Capital buys Aditya Birla Retail

Kumar Mangalam Birla-led $45-billion Aditya Birla Group has sold its entire stake in retail arm Aditya Birla Retail Limited (ABRL), which owns and operates food and grocery retail under the ‘More’ brand, to mid-market private equity firm Samara Capital.

The deal was done at an enterprise value (EV) of ₹4,200 crore, according to sources in the know of the development, and comes barely a month after the U.S. retail giant Walmart Inc. completed the acquisition of India’s largest e-tailer Flipkart for $16.7 billion.

Mr. Birla, in an e-mail to ABRL employees, said: “In order to achieve the full potential, ABRL needs a strong balance sheet and continued large investments. Keeping in mind the group’s capital allocation priorities and ABRL needs, I believe that at this stage, it serves the best in interests of the business to opt for an external investor. Towards this end, we have decided to accept an offer from Samara Capital for acquiring the business.”

ABRL’s holding companies, RKN Retail Pvt. Ltd. and Kanishtha Finance & Investment Pvt. Ltd, inked a pact to sell almost 100% of the retail chain to an entity controlled by Samara, according to a stock exchange disclosure.

Board gives nod

“The board of directors of the company, at its meeting held on September 19, 2018, has approved the sale of its entire shareholding in ABRL i.e. 1,97,22,22,430 equity shares of ABRL, constituting 62.19% of the paid up capital of ABRL, to Witzig Advisory Services Private Limited (Witzig) which is owned and controlled by the Samara Alternative Investment Fund,” said a statement without disclosing the deal size.

ABRL ventured into the food and grocery retail sectors in 2007, acquiring Trinethra Super Retail and since expanded its presence across the country under the brand ‘More’ with two formats — Supermarkets and Hypermarkets.

“Further, in terms of the aforesaid approval of the board, the company has... on September 19, 2018, jointly with Kanishtha Finance and Investment Private Limited and ABRL, entered into a share purchase agreement with Witzig, to sell their combined stake aggregating to 99.99% in ABRL (said SPA),” the statement added.

The food and grocery market is estimated at size of $400 billion and organised retail is expected to grow rapidly in line with the demographic changes, growth of Indian economy and discretionary spending.

More has 523 supermarkets and 20 hypermarkets across the country with strength of around 20 million members, known as Clubmore.

The sale of shares of ABRL would be subject to the terms of the SPA and regulatory approvals and consents, as may be necessary, the statement added.

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Printable version | May 15, 2021 5:56:15 AM | https://www.thehindu.com/business/Industry/samara-capital-buys-aditya-birla-retail/article24988698.ece

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