MUMBAI: India's domestic retail sector is poised for further consolidation as the Aditya Birla Group on Tuesday agreed to acquire the hypermarket business of Jubilant Industries, which operates under the Total Superstore brand, in a slump sale all-cash deal.
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The acquisition to be made by Aditya Birla Retail (ABRL) led to a 10 % jump in shares of Jubilant to Rs 163.9 on a day the sensex crashed by 630 points. The deal size is expected to be about Rs 100 crore.
But the transaction marks the third consolidation announcement in the retail sector within a fortnight and second from the Aditya Birla Group. TOI was the first to report about the acquisition on March 10.
www.sevagiri.com
The acquisition to be made by Aditya Birla Retail (ABRL) led to a 10 % jump in shares of Jubilant to Rs 163.9 on a day the sensex crashed by 630 points. The deal size is expected to be about Rs 100 crore.
But the transaction marks the third consolidation announcement in the retail sector within a fortnight and second from the Aditya Birla Group. TOI was the first to report about the acquisition on March 10.
Earlier this month, Aditya Birla Group merged its apparel businesses to form a $2-billion entity — Aditya Birla Fashion and Retail. A day after Aditya Birla's merger announcement, Kishore Biyani-led Future Group said it will take control of Bharti Retail in a multi-tier all-stock deal worth Rs 750 crore to create a Rs 15,000-crore behemoth.
" We believe there would be further consolidation in this space as these players would want to increase their retail footprint buying out the regional and small players with 20 to 100 retail stores," Harish H V, partner, Grant Thornton India, told TOI, adding that this is because the large players are now finding its extremely difficult to find a prime space to expand.
Pranab Barua, business director (apparel & retail), Aditya Birla Group, said, "The acquisition is a good strategic fit for ABRL in terms of its store locations and catchment areas."
" We believe there would be further consolidation in this space as these players would want to increase their retail footprint buying out the regional and small players with 20 to 100 retail stores," Harish H V, partner, Grant Thornton India, told TOI, adding that this is because the large players are now finding its extremely difficult to find a prime space to expand.
Pranab Barua, business director (apparel & retail), Aditya Birla Group, said, "The acquisition is a good strategic fit for ABRL in terms of its store locations and catchment areas."
Source - Times Of India
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