Yes you heard it right. Future group’s Owner Kishore Biyani is in advanced talk to buy Aditya Birla Group’s Retail arm Aditya Birla Retail. Future Group plans to consolidate its position in the supermarket brick and mortar business and this move would help him consolidate groups position. According to top sources , the two groups got into a discussion last year but had to shelve off their plan due to some valuation issues. Both the groups have resumed their negotiation in this regard and are in final stage to crack the deal. While the discussions are exploratory , Future group is doing a due diligence for a possible merger or acquisition. If the deal materialize , this will be their fourth acquisition in last 5 years and would make them the leader in retail chain with Reliance Retail being their close competitor.
The Pole Position
Aditya Birla gourp is the fourth largest retail chain after Future group , Reliance retail and D Mart . The Aditya Reatail group has more than 500 odd stores covering more than 2 million square feet of retail space .The group registered a gross revenue of Rs 2948 crores in year 2014-15. The group is backed by High margin brands like Allen Solly and Van Heusen.
The Debt Burden
With the acquisition , group would increase its total debt from 4941 crore to a substantial amount as ARBL in itself have a total debt of 5232 crore in Fy 2014-15.