ABRL Group's More to be acquired by Samara Capital
Samara Capital and US-based e-commerce giant Amazon.com Inc. have signed an agreement to buy Aditya Birla Retail Ltd’s (ABRL) food and grocery retail chain brand, More. ABRL’s holding companies, RKN Retail Pvt. Ltd and Kanishtha Finance & Investment Pvt. Ltd, inked a pact to sell almost 100% of the privately held retail chain to an entity controlled by Samara.
The deal had been structured in a way where Samara will own a majority stake in the retail chain while Amazon will hold a minority stake. Samara had been in talks with ABRL for the transaction for the past few months.
The deal was struck at an enterprise valuation of Rs 4,200 crore ($580 million). Samara will have a 51% stake in More while Amazon will hold the balance 49%, the report said.
Aditya Birla Group runs 523 supermarkets and 20 hypermarkets under the More brand, thus becoming the fourth-largest supermarket chain in the country.
With this sign-up, Jeff Bezos-owned Amazon will compete neck-to-neck with Walmart-owned Flipkart in India’s e-commerce market space. The acquisition will give it a ready base to expand its Indian grocery retail business for which it had earmarked $500 million last year. Amazon started rolling out its food retail venture in India this year.
The deal is also in line with Amazon's offline-to-online retail strategy, which is also the vision of Alibaba.
However, since Samara’s funds are sponsored and managed by Indians, the investment vehicle will be considered a domestic entity irrespective of the dollar capital it may have raised from foreign investors. Now both Samara and Amazon will structure the ABRL transaction to ensure they meet Indian regulations that allow foreign direct investment of only up to 51% in multi-brand retail.
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