Samara Alternative Investment Fund, which owns Witzig Advisory Services, is to acquire the food and grocery retail business of Aditya Birla Group, More. Amazon will have a 49 per cent stake in the supermarket retail chain. Though the transaction amount was not disclosed, Business Standard reported that the deal is to be closed around Rs.42 billion.
Samara will acquire More from Aditya Birla Retail (ABRL) in a two-step process. RKN Retail Pvt. Ltd. has a 62.2 per cent stake and Kanishtha Finance and Investment Pvt. Ltd. has the remaining share in ABRL. So, Samara will first acquire a stake in ABRL from RKN Retail and then from Kanishtha Finance. RKN Retail and Kanishtha Finance are promoter entities of ABRL.
Amazon had recently made it known that it wishes to invest in the food retail business in India and had allocated $500 million for the same. The move to acquire ABRL’s More came in after this news was brought to light.
Amazon will first purchase a 35 per cent stake from Samara and then raise the stake to 49 per cent gradually. Thus, the partnership between Samara and Amazon will be in the ratio 51:49. Amazon wishes to hold a stake less than the 51 per cent threshold so that there are no complications with regard to approvals.
Aditya Birla Group entered the food and grocery retail business with the acquisition of Trinethra Super Retail in 2007. More is the fourth-largest retail chain in India with 20 hypermarkets and 523 supermarkets across the country. The retail brands owned by the group are More Fresh, More Daily, Blueearth, and Prarthana.