Samara CapitalAmazon set to acquire ABRL’s More
MUMBAI: Private equity firm Samara Capital along with Amazon.com Inc., the world’s largest online retailer, have agreed to buy Aditya Birla Group’s food and grocery retail chain More for an undisclosed sum.
A person close to the development, however, said that the transaction is valued at around ₹4,200 crore.
The acquisition of Aditya Birla Retail Ltd (ABRL), which runs More, will be done through Samara Capital’s arm Witzig Advisory Services Pvt. Ltd in which Amazon is a minority shareholder.
RKN Retail Pvt. Ltd, a promoter entity of ABRL, said it has agreed to sell its entire 62.2% stake in the retailer to Witzig.
“The board of directors of the company, at its meeting held on September 19, 2018, has approved the sale of its entire shareholding in Aditya Birla Retail Ltd,” RKN said in an exchange filing on Wednesday.
Samara and Amazon will be acquiring More through a twostep process. It will first buy the stake in ABRL from RKN Retail. The balance stake will be acquired from Kanishtha Finance and Investment Pvt. Ltd, another promoter entity of ABRL.
Spokespersons for Samara Capital and Aditya Birla Group declined to comment. Calls and an email to an Amazon spokesperson in India were not answered immediately. On August 20, Mint reported that Amazon and Samara Capital will together form an entity to acquire ABRL as foreign direct investment in multi-brand retail is capped at 51%.
“After the closure of transaction, Amazon will hold around 49% stake in the company and the balance will be held by Samara. Amazon will be holding less than the threshold of 51% to avoid complications in seeking approvals,” the person cited above said.
The move to acquire ABRL follows Amazon’s plans to build its food retail business in India for which it has made a separate allocation of $500 million. More will help Amazon execute its strategy to build out an offline presence in India at a time when its US rival Walmart Inc. is seeking to establish its dominance in online retail through the purchase of Flipkart for $16 billion. In August, Walmart completed its acquisition of Flipkart, India’s biggest e-commerce company. Aditya Birla Group ventured into food and grocery retailing business in 2007 through its acquisition of Trinethra Super Retail.
The promoters of HT Media Ltd, which publishes Mint, and Jubilant Industries are closely related. There are, however, no promoter crossholdings.
(Anirban Sen in Bengaluru contributed to this story.)