Indian retailers now have to contend with Amazon even in the physical space. The US e-commerce giant and home-grown private equity firm Samara Capital have jointly bought More, Aditya Birla grocery retail chain (ABRL). The Aditya Birla Group is selling supermarket chain More to Witzig Advisory Services, owned by Samara Alternative Investment Fund, in a deal that will eventually see Amazon picking up a 49% stake, according to people with knowledge of the matter. The deal pegged at about Rs 4,200 crore will give the online giant access to more than 500 physical outposts across the country. The Witzig-Samara end of the transaction was made public in an exchange filing on Wednesday. RKN Retail, which owns Birla’s retail venture along with Kanishtha Finance and Investment Pvt, told the BSE that the board had approved the sale of its entire shareholding in ABRL to Witzig.
ABRL, Samara and Amazon didn’t respond to queries sent by email. “Amazon will initially buy 35% in the retail chain from Samara AIF and will raise it to 49% over time,” said the people cited above. Since Samara AIF is sponsored and managed by Indians, it will be considered a domestically controlled vehicle as per law, irrespective of the percentage of the foreign corpus, and compliant with the rules on overseas investment in retail, said one of them. It took more than a month for the legal teams of all the parties involved to arrive at the complex deal structure, said the people cited above. Aditya Birla Group chairman Kumar Mangalam Birla told employees about the plan in an email.