Flipkart-abfrl deal gets CCI nod

THE DEAL WILL HELP ADITYA BIRLA FASHION CUT ITS DEBT AND EXPAND ITS APPAREL PORTFOLIO

BENGALURU: The Competition Commission of India (CCI) on Wednesday approved the ₹1,500-crore Flipkart-aditya Birla Fashion and Retail Ltd (ABFRL) deal, which will help the Walmart Inc.-owned e-tailer consolidate its position in the apparel business in India.

“(The) commission approves acquisition of a 7.8% minority stake in Aditya Birla Fashion and Retail Ltd by Flipkart Investments Pvt. Ltd,” CCI said in a tweet.

The deal, announced last October, will help Aditya Birla Fashion cut its debt and expand its apparel portfolio, while Flipkart will have a significant edge over Amazon, which is trying to challenge its dominance in online fashion retailing.

Flipkart, which operates the largest online fashion marketplace Myntra, will work with Aditya Birla Fashion, for sale and distribution of its brands.

Offline retailers were in a bind as the covid-led lockdown disrupted retail businesses. Aditya Birla Fashion, which has a significant presence in the formal wear category, saw muted demand for office wear with people working from home.

E-commerce sales contribute 6% of its business.

Through this transaction, Flipkart will offer a wide range of products for fashion-conscious consumers across retail formats, Kalyan Krishnamurthy, chief executive officer of Flipkart Group, had said in October.

In July, 2020, Flipkart had also bought a stake in Arvind Youth Brands, the owner of the Flying Machine brand, for ₹260 crore.