Aditya Birla buys retail business of Jubilant Industries

On May 3, it merged its apparel businesses into a Rs 5,290-cr entity named Aditya Birla Fashion and Retail, which will be India's largest pure-play fashion lifestyle firm

In a another consolidation exercise in the domestic retail sector, Aditya Birla Retail today acquired Jubilant Industries' hypermarket business in a slump sale deal.

This is the third consolidation announcement in the retail sector within a fortnight. Earlier this month, Aditya Birla Group merged its apparel businesses into a Rs 5,290-crore entity named Aditya Birla Fashion and Retail (Click here to read the story).

A day after Aditya Birla's merger announcement, Kishore Biyani-led Future Group said it will take control of Bharti Retail in a multi-tier all-stock deal worth Rs 750 crore to create a Rs 15,000-crore behemoth.

In a BSE filing, Jubilant Industries said Aditya Birla will acquire "four hypermarket stores in Bengaluru, India, along with certain specified assets and liabilities, including dedicated employees, contracts, licences, permits, consents and approvals related to Jubilant Agri and Consumer Products Ltd, a wholly-owned subsidiary of Jubilant Industries".

"The transaction is expected to be completed within four months, subject to the necessary statutory, regulatory and other approvals, including approval of the Competition Commission of India and the shareholders of the company," the filing added.

On May 3, Aditya Birla Group merged its apparel businesses into a entity named ABFRL, which will be the largest pure-play fashion lifestyle company in India.

Under the scheme of arrangement approved by the boards of respective companies, the apparel businesses of group holding company Aditya Birla Nuvo (ABNL) and those of another group firm Madura Garments Lifestyle Retail Company (MGLRCL) would be demerged into listed firm Pantaloons Fashion & Retail (PFRL).

The new entity will have a retail network of 1,869 exclusive stores. According to analysts, the combined entity will have a revenue of over Rs 6,000 crore.

Under another deal announced, Future Retail will demerge its retail business which will be merged into Bharti Retail while the latter's retail infrastructure business will also undergo a similar process to be merged with Future Retail.

Bharti Retail will get about 15 per cent stake in both the merged entities. Bharti will get Rs 500 crore worth of stocks, representing 9-10 per cent equity in both the companies and Rs 250 crore in the form of optionally convertible debentures.

Future Group promoters will hold 46-47 per cent stake each in the two new entities and the rest will be held by public shareholders. Both entities will be listed on stock exchanges.

Post announcement, shares of Jubilant Industries were trading up 10 per cent at Rs 163.90 on BSE.