ABFRL to acquire controlling stake in TCNS Clothing for Rs 1,650 crore

Aditya Birla Fashion and Retail (ABFRL) has entered into a definitive agreement to acquire controlling stake (51 per cent) in TCNS Clothing for Rs 1,650 crore. 

The transaction will be carried out through the acquisition of the founding promoter’s stake through a sale and purchase agreement and a conditional public open offer followed by a merger between the two entities. 

The value of the promoter stake and open offer consideration for TCNS is Rs 1,650 crore for 51 per cent stake, ABFRL said in a press release. 

“As part of the transaction, ABFRL will make a conditional open offer to acquire up to 29 per cent stake at Rs 503 per share from public shareholders and acquire the remaining stake from the founder promoters to reach an overall shareholding of 51 per cent in TCNS,” ABFRL said.

Pursuant to the above, TCNS will be amalgamated with ABFRL under the merger scheme wherein public shareholders of TCNS (as on effective date) will receive 11 shares of ABFRL for every six shares that they hold in TCNS.

The transaction is subject to regulatory approvals including approvals from the Competition Commission of India, SEBI, Stock Exchanges, and National Company Law Tribunal.

TCNS Clothing has ethnic brands W, Aurelia, Wishful, Folksong and Elleven. 

Kumar Mangalam Birla, chairman, Aditya Birla Group, said in the release, “This deal is yet another marker of the Aditya Birla Group’s faith in the dynamism and buoyancy of the Indian consumer economy. As India stands on the cusp of a multi-decadal consumption boom, ABFRL is a forerunner in shaping the fashion landscape of our vibrant nation.”

He added, “For ABFRL, the TCNS deal is indeed a significant milestone as it complements our existing portfolio of exceptional brands across the entire spectrum of Indian fashion. By embracing TCNS's portfolio of loved women’s ethnic brands, we are reinforcing our commitment to ethnic wear, the largest category in the apparel industry. With this acquisition, the fast-growing ABFRL platform is poised for the next phase of transformational growth.”

Anant Daga, managing director of TCNS also said in the release, “…Over the last 20 years, we have built India’s most successful women’s franchise on the back of our leading brands. The market continues to offer long-term growth opportunities and our partnership with ABFRL will help us fully realise this potential. ABFRL’s proven brand- building capability, distribution strength and strong ecosystem of partners will help our brands into its next phase of growth and profitability.”