Samara to buy India's Aditya Birla Retail

According to a regulatory filing, Samara will acquire a 62.2% stake from RKN Retail, the holding company for ABRL, and will buy additional shares from Kanishtha Finance, an investment vehicle owned by Aditya Birla Group chairman Kumar Mangalam Birla, for a total interest of 99.99%. Financial details of the transaction have not been disclosed.

Various Indian media outlets have reported the value of the transaction at around INR420 billion ($5.8 billion), and that US e-commerce giant Amazon is also participating in the deal. Amazon will reportedly acquire a 49% stake in ABRL from Witzig, the Samara subsidiary in which it holds a minority stake. Samara declined to comment.

ABRL manages 523 supermarkets and 20 hypermarkets across India under the More brand, offering fresh produce and groceries and other products including clothing, personal care, and home care. It was the first Indian retailer to receive the ISO 22000 food safety management system certification. The company produces a variety of own-brand merchandise and also operates a loyalty program, Clubmore, that has more than 20 million members.

Aditya Birla launched ABRL in 2007 with the acquisition of the Trinethra Super Retail supermarket chain. The company does not publish its financial data, but a report by ICRA Research last year found that ABRL’s revenue for the year ended March 2017 came to INR42 billion, up from INR35 billion the year before. Its net loss shrank only slightly over the same period, from INR6.5 billion to INR6.4 billion.

More than 93% of ABRL’s locations reported that they made a profit at the store level, but the company has struggled to translate this to overall profit due to high overhead costs, despite efforts at consolidation. It also faces high interest payments due to its external debt, which stood at INR39 billion as of November 2017.

Amazon entered India in 2013 and is currently battling for e-commerce market share with Flipkart, the local giant that was acquired by WalMart earlier this year. The company has backed several local technology start-ups, including online insurance broker Acko, financial marketplace BankBazaar, and home services company Housejoy. Acquiring ABRL would give Amazon access to the supermarket chain’s widespread distribution network, much as the Flipkart purchase did for Walmart.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Consumer
• Buyouts
• India
• Samara Capital