Samara Capital and Amazon India will acquire food and grocery retail chain More from Aditya Birla Group.
The More business will most likely be purchased this week for an enterprise value of Rs 4100-4200 crore (US$576.5–590.6 million), wiping out Aditya Birla’s current debt. Samara will take a 51 per cent shareholding with Amazon taking the remaining 49 per cent. A third partner, Goldman Sachs, was reportedly set to be a member of the consortium but exited before the deal was set.
An executive familiar with the deal said: “Since the back-end company where Samara and Amazon are investing has no restriction on FDI, there is no problem. That is, once the deal is done, ABRL need not [require] approvals from individual state governments to operate More stores”.
Under Indian law, the firm will be considered a domestic business as the purchasing fund is sponsored and managed by Indians.
More is the fourth largest supermarket chain in India, operating 575 stores. Following the takeover, the new owners will be asking Aditya Birla to set up 100-150 new stores annually. Amazon India will be using the physical stores network to support its omni-channel strategy and Prime Now platform in the region.
“Online food and grocery retailing is not possible without physical stores and hence Amazon wants More as its part of the omni-channel ecosystem in India,” the executive said.
This will be Amazon India’s second direct investment in physical retail stores since its 5 per cent stake in department store chain Shoppers Stop last year. It is expected to come into competition with Chinese e-commerce giant Alibaba, which is making similar moves in India.
