ABFRL to acquire controlling stake in TCNS Clothing for Rs 1,650 crore

Aditya Birla Fashion and Retail (ABFRL) has entered into a definitive agreement to acquire a controlling stake (51%) in TCNS Clothing for Rs 1,650 crore.

The transaction will be executed through the acquisition of the share of the founding promoter through a sale and purchase agreement and a conditional public open offer, followed by a merger between the two entities.

ABFRL said in a press release that the value of the promoter and open consideration stake in TCNS is Rs 1,650 crore for 51 per cent stake.

“As part of the deal, ABFRL will make a conditional open-ended offer to acquire up to 29 percent of the shares at Rs 503 each from the public shareholders and acquire the remaining share from the founding promoters to reach a 51 percent public shareholding in TCNS,” ABFRL said.

In accordance with the above, TCNS will be merged with ABFRL under the merger scheme whereby the general shareholders of TCNS will (as on the effective date) receive 11 shares of ABFRL for every six shares they hold in TCNS.

The transaction is subject to regulatory approvals including those from the Competition Commission of India, SEBI, stock exchanges, and the National Court of Companies Law.

TCNS Clothing owns ethnic brands W, Aurelia, Wishful, Folksong and Elleven.

Kumar Mangalam Birla, Chairman of the Aditya Birla Group, said in the release: “This transaction is another sign of the Aditya Birla Group’s belief in the dynamism and revival of India’s consumer economy. As India stands on the cusp of a multi-decade consumer boom, ABFRL is a pioneer in shaping Our vibrant nation’s fashion scene.”

He added, “For ABFRL, the TCNS deal is indeed a milestone as it complements our existing portfolio of exceptional brands across the entire spectrum of Indian fashion. By embracing TCNS’s range of beloved women’s ethnic brands, we are strengthening our commitment to ethnic wear, the largest category in apparel industry. With this acquisition, ABFRL’s fast-growing platform is poised for its next phase of transformative growth.”

Anant Daga, Managing Director of TCNS also said in the release, “…over the past 20 years, we have built the most successful women’s franchise in India on the back of our flagship brands. The market continues to present long-term growth opportunities and our partnership with ABFRL will help us realize this potential ABFRL’s proven brand building capability, distribution strength and strong partner ecosystem will aid our brands in their next phase of growth and profitability.”