Aditya Birla Nuvo to acquire majority stake in Future Group PRIL

1 May 2012 (Last Updated May 1st, 2012 07:00)

Aditya Birla Nuvo (ABNL) plans to acquire a controlling stake in Indian multi-format retail group Future Group's ‘Pantaloons Format' business post its demerger from Pantaloon Retail (India) Limited (PRIL).

Aditya Birla Nuvo

Aditya Birla Nuvo (ABNL) plans to acquire a controlling stake in Indian multi-format retail group Future Group's 'Pantaloons Format' business post its demerger from Pantaloon Retail (India) Limited (PRIL).

The Pantaloons Format, which Future Group launched in 1997, has 65 shops in 35 Indian cities and a reverse logistics chain, Pantaloons Factory Outlet, which has 21 stores.

ABNL chairman Kumar Mangalam Birla said the proposed acquisition is in line with the firm's strategic intent to be on the top of the league and to create the largest integrated branded fashion player in the country through an extension into the value segment.

This acquisition will catapult ABNL to the pole position in the branded fashion space in all the segments with a pan-India presence," Birla said.

"On completion of the acquisition, the two entities 'ABNL's Madura Fashion & Lifestyle' and 'PRIL' will work closely as partners to derive operational synergies, in terms of back-end, supply chain and many other important value drivers of the business.

"We are delighted to have Mr. Kishore Biyani as our partner in the Pantaloons Format business. Furthermore, to ensure continuity, the current management team will continue to run the business."

ABNL's Madura Fashion & Lifestyle had revenue of Rs21.45bn ($407.48m) in calendar year 2011 and retail space of 1.6 million ft² across the country, while Pantaloons Format business is spread over 2.05 million ft².

With this acquisition, the company will have multiple store formats, brands, and a complete range across all categories - formal wear, casual wear, ethnic wear, party wear, and sportswear for men, women and kids.

Pantaloon Retail will demerge its Pantaloons Format business through a court scheme of arrangement and post-demerger its total debt would decrease by Rs16bn ($303.95m).

Aditya Birla Nuvo is part of the Aditya Birla Group, which operates in 36 countries across the globe and employs over 133,000 people.

Image: The Pantaloons Format, which Future Group launched in 1997, has 65 shops in 35 Indian cities and a reverse logistics chain, Pantaloons Factory Outlet, which has 21 stores. Photo: Aditya Birla Nuvo