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Pantaloons merger creates $833m fashion giant

A mega merger of Indian fashion retailers and brands will create the nation’s largest fashion entity.

Three businesses will be combined into a new entity called Aditya Birla Fashion & Retail, which will be publicly listed and boast an annual turnover exceeding Rs. 5,290 Crore, (believed to equate to US$833 million)  based on figures to last December 31.

The merging entities are Madura Fashion, Madura Lifestyle and Pantaloons Fashion & Retail. Combined they will have a network of 1869 stores across India with 4.8 million sqft of retail space, based on March 31 data.

The boards of all three companies have agreed to the deal, whcih is aimed at consolidating the businesses, all controlled by Indian billionaire Kumar Mangalam Birla, who has decided to bring all his retail businesses under the one spun-off entity.

Pantaloons Fashion & Retail will absorb the other two businesses and then change its name to Aditya Birla Fashion & Retail. Already it is among the top three large format fashion retailers and the largest branded womenswear retailer in India. Pantaloons’ wide customer reach spans 104 Stores and 30 Factory outlets across 2.3 million sq. ft. in 49 cities.

Madura Fashion markets apparel brands including Louis Philippe, Van Heusen, Allen Solly, Peter England and People. It is the largest branded menswear player in India. Louis Philippe and Van Heusen are largest selling brands in India.

Madura Lifestyle retails leading international luxury brands under the retail format ‘The Collective’. It also retails Madura Fashion brands under the retail format ‘Planet Fashion’.

Kumar Mangalam Birla, chairman of Aditya Birla Group said the the consolidation will create India’s largest pure play fashion & lifestyle company with “a strong bouquet of leading fashion brands and retail formats”.

“This move brings India’s number one branded menswear and womenswear players together.

“The consolidation will unlock value for the shareholders by giving them an opportunity to participate in the promising fashion space directly through ABFRL”, Birla added.

Pranab Barua, business director, apparel & retail business, said: “This move to bring all the branded apparels businesses under one roof will accelerate the growth of these businesses and help exploit emerging opportunities presented by the rapidly growing Indian apparel market.”

The apparels category is the largest contributor to the organised retailing market in India which is expected to grow at a robust CAGR of 18 per cent over the next few years.

The consolidation will enable operational synergies in areas such as sourcing, real estate and technology platforms.

The transaction is subject to the necessary statutory and regulatory approvals including approvals of the respective High Courts, the Stock Exchanges, SEBI, the respective Shareholders and lenders / creditors of each of the companies. The transaction is expected to be concluded in the next six to nine months.

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