Kumar Mangalam Birla sells its retail chain ‘More’ to Samara-Amazon

Samara Capital and Amazon has acquired Aditya Birla Group’s food and grocery retail chain ‘More’, for an enterprise valuation of around Rs 4500 crore as reported by leading media resources. This acquisition end the retail dream of Kumar Mangalam Birla. More is said to be the fourth-largest supermarket chain in the country after Future Group’s Big Bazaar, Reliance Retail and DMart.

Currently, ABRL owns and operates 575 More retails stores across the country. According leading media sources, Samara acquired majority 51% in Kumar Mangalam Birla’s ABR, where as the remaining 49% is acquired by Amazon.com NV Investment Holdings LLC, Amazon’s investment arm. The deal is now tabled for clearance from the Competition Commission of India (CCI).

Samara Capital made its investment in this deal through its alternative investment fund, Samara AIF that is backed by multiple overseas investors. Samara AIF will still be considered as a domestic firm because it is sponsored and managed by Indians, irrespective of the percentage of foreign corpus present in the firm, as stated n a report in The Economic Times.

The financial daily further explains that the acquisition is made through an existing facility management back-end company. An executive of the company stated that the back-end company has no restriction on FDI. Hence, there is no problem, implying that ABRL need not take individual permissions from state governments to operate More stores, which is otherwise a mandatory requirement under multi-brand retail FDI.

The Birla group inked this deal so as to take care of ABRL’s debt that stood at Rs 4,000 crore as of March 2018. Once the deal process is completed, Samara Capital and Amazon will be in a spree to rapidly expand the chain which was put on hold due to its ever-increasing debt. They plan to open 90 stores this current fiscal and take it up to 100-150 stores every year including neighbourhood supermarkets and hypermarkets.

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