Amazon, PE firm Samara in talks to acquire More

NEW DELHI/BENGALURU: A year after its mammoth buyout of US-based grocery chain Whole Foods, Amazon is doubling down on the grocery business in India and is currently in advanced discussions to take a 40-49% stake in Aditya Birla Retail Ltd’s (ABRL’s) More supermarket chain, according to three people directly aware of the talks.

Amazon together with Samara Capital could buy More from Aditya Birla for roughly ₹4,200-4,400 crore, these people said on condition of anonymity.

Samara and Amazon will be putting in money in a shell entity, which in turn will buy More from Aditya Birla, one of the three people said.

Even as India allows foreign retailers to invest and buy upto 51% in multi-brand retail with government approval, there are several conditions that foreign investors need to comply with.

Amazon is taking an indirect route to avoid any complications.

In recent months, Amazon has also held talks with Sanjiv Goenka-owned supermarket chain Spencer’s Retail to explore a potential investment. However the talks did not materialize in a deal, the people mentioned above said.

Amazon, which has set aside at least $500 million to invest in growing out its food retail business in India, is going all-out to ensure that it does not miss out in the battle to gain market share in groceries, which is widely seen as the biggest battleground for India’s largest online retailers.

The latest talks to buy a majority stake in ABRL’s More supermarket chain actually began several months ago,

AMAZON TOGETHER WITH SAMARA CAPITAL COULD BUY MORE FROM ADITYA BIRLA FOR ROUGHLY ₹4,2004,400 CRORE

stretching back to the beginning of the year, the people mentioned above said.

In May, The Economic Times had reported that Samara Capital was in talks to buy out More and later in June reported that ABRL had signed an agreement to sell More for roughly ₹4,300 crore.

A number of media reports over the past six months have also indicated that Amazon has held talks to buy a stake in Kishore Biyani’s Future Group, although it is unclear at present whether that deal will go through.

Amazon India did not respond to requests for comment. Samara Capital could not be reached for comment.

An Aditya Birla Group spokesperson said that the company does not comment on “market speculation”.

Amazon’s efforts to double down on the retail and grocery business in India, comes at a time when its biggest rival in the US is also sparing no expense to dominate India’s retail and commerce landscape.

Walmart, which has just closed its $16-billion buyout of India’s largest e-commerce firm Flipkart, also has strong roots in the grocery business and is expected to mount a significant challenge against Amazon in the coming months and years.

More is currently the fourth largest supermarket chain in the country, after Reliance Retail, Future Group and D-Mart.