Aditya Birla Fashion and Retail Limited (ABFRL) has announced that it will acquire majority stake in women’s branded apparel company TCNS Clothing in a deal worth Rs 1,650 crore. The Aditya Birla Group company has entered into a definitive agreement to acquire 51 per cent stake in TCNS Clothing, which owns ethnic brands such as W, Aurelia, Wishful, Folksong and Eleven, a joint statement said.
As per the deal, it will acquire the founder promoter stake of TCNS Clothing through an SPA (share purchase agreement) and a conditional public open offer following the merger between the two entities.
“The promoter stake and open offer consideration for TCNS is valued at Rs 1,650 crore for a 51 per cent stake, which is one of the largest deals in the Indian fashion sector,” the statement said.
TCNS Clothing had a turnover of Rs 896.05 crore in the financial year ending March 31, 2022.
The acquisition is in line with the company’s objective of creating a comprehensive fashion portfolio across consumer segments and price points.
Further, the acquisition is subject to regulatory approval from the Competition Commission of India (CCI), SEBI, stock exchanges, National Company Law Tribunal (NCLT) and approval by the requisite majority of shareholders of ABFRL, the statement said.
The company expects the transaction to be completed in 9-12 months.
“As aforesaid, TCNS will be amalgamated with ABFRL under the Scheme of Amalgamation, wherein public shareholders of TCNS (on the Effective Date) will receive 11 shares of ABFRL for every 6 shares held in TCNS.”
The cost of acquisition or the price at which the shares have been acquired, ABFRL said, is “at a consideration of Rs 503 per sale shares, subject to adjustments under the SPA”.
Further, “the open offer is being made at Rs 503 per equity share, which has been determined as per SAST regulations,” the statement said.
Under the open offer, ABFRL “will acquire up to 29 per cent of the extended share capital, subject to a minimum level of acceptance,” it added.
Commenting on the development, Aditya Birla Group Chairman Kumar Mangalam Birla said for ABFRL, the TCNS deal is indeed a significant milestone as it complements its existing portfolio of exceptional brands across the entire spectrum of Indian fashion.
“Portfolio of beloved 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 transformative growth.”
Anant Daga, Managing Director, TCNS said, “Over the last 20 years, we have built India’s most successful women’s franchise under our flagship brands. The market continues to offer long-term growth opportunities and our partnership with ABFRL will help us fully realize this potential. profitability,” he said.
ABFRL posted a revenue of Rs 8,136 crore for the financial year, which ended March 31, 2022. It is India’s first billion-dollar pure-play fashion powerhouse.
As on March 31, 2022, the company has a network of 3,468 stores and a presence at 6,515 points of sale in department stores across India.
It showcases India’s biggest brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England. It also owns the leading fashion retail chain Pantaloons.
In addition, it is also a multi-brand retailer of international brands and has long-standing exclusive partnerships with Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21, American Eagle and Reebok.
In the ethnic wear business, it owns brands like Jaypore, Taswa and Marigold Lane.
ABFRL also has strategic partnerships with designers Shantanu and Nikhil, Tarun Tahiliani, Sabyasachi and House of Masaba.
Ashish Dixit, Managing Director, ABFRL said, “As young Indians identify with a newfound confidence in their identity woven around Indian culture and heritage, the next set of leading consumer brands will be created in the Indian ethnic wear space. TCNS , has been catering to the fashion needs of Indian women across markets and price points through its brands W, Aurelia, Wishful, Folksong and Eleven.Each of these brands has been built over a long period of time and enjoys tremendous love from consumers. This transaction is an important part of our strategy to build India’s most comprehensive ethnic wear portfolio.”
(With PTI inputs)
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