Kishore Biyani’s Future group, will continue to operate its Big Bazaar supermarkets
INDIA’S diversified Aditya Birla group is to take over the flagship clothing chain of Pantaloon Retail, the country’s largest listed retailer, the two companies said on Monday (April 30).
Aditya Birla Nuvo will invest a total of more than `16bn ($307m/£189.37m) for a majority stake in a new firm which will include Pantaloon’s 86 fashion stores across India.
Pantaloon Retail, controlled by Kishore Biyani’s Future group, will continue to operate its Big Bazaar supermarkets and other ventures.
The deal will help Nuvo expand its branded apparel business and Pantaloon Retail reduce its debt by `16bn.
“The proposed acquisition is in line with our strategic intent to create the largest integrated branded fashion player in the country,” Kumar Mangalam Birla, chairman of the mobiles-to-aluminium Aditya Birla group said in a statement.
Nuvo - which already owns apparel brands Louise Phillipe and Allen Solly - said it will have a minimum 50.01 per cent stake in the yet-to-be-named new entity after an open offer that will see it relisted on the stock exchange.
Pantaloon shares closed up 9.25 per cent at `187.75 ($3.56/£2.19) at the Bombay Stock Exchange after the announcement.
India’s retail sector is moving through tough times.
The government late last year said it planned to allow in foreign supermarket chains such as Wal-Mart, but then reversed its decision after heavy parliamentary opposition and protests from small shopkeepers.
Analysts are betting on retail and financial services sector growth, as India’s 1.2 billion people move towards a more Western-style consumer economy.
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