Samara-Amazon group adds More to cart for Rs 4.2K

Private equity fund Samara Capital and online retail behemoth Amazon on Wednesday signed a deal to acquire Aditya Birla Group's food and grocery retail chain More for an enterprise value of Rs 4,200 crore.

Aditya Birla Retail owns 575 More stores, making it the fourth largest offline supermarket chain in the $672-bln domestic retail market.

The company had posted a net loss Rs 640 crore on sales of Rs 4,190 crore for 2016-17.

India-focused private equity firm Samara Capital will acquire 51 per cent in Aditya Birla Retail, while Amazon.com NV Investment Holdings will hold the rest.

The deal will have to be approved by the Competition Commission of India.

Samara Capital will invest in Aditya Birla Retail through its alternative investment fund, Samara AIF.

The deal will effectively make Aditya Birla Retail a debt-free company.

The company had Rs 4,000 crore of debt due to leveraged acquisitions such as those of Trinethra, Fabmall and Total Super Store in the past decade, the report said.

Samara Capital and Amazon plan to restart the process of store additions, which was stalled due to the debt burden. The two entities plan to add 100-150 outlets ever year.

The investment is in line with US-based Amazon's global practice of acquiring brick-and-mortar stores to enhance the online retail channel. Amazon's investment in More is its second in the offline space in India. Last year, the retail major had bought 5 per cent stake in fashion retailer Shoppers Stop for around Rs 180 crore.

Amazon's entry into the offline food and grocery retailing segment comes at a time when Reliance Industries Ltd is firming up plans to launch a hybrid online-to-offline retail platform.