Aditya Birla Fashion and Retail (ABFRL) has entered into definitive agreements to acquire TCNS Clothing, the owner of ethnic brands, including W, Aurelia, Wishful, Folksong and Elleven.
This transaction with be carried out in two stages. First, ABFRL will acquire the founding promoter’s stake through a SPA and a conditional public open offer. This will be followed by a merger between the two entities.
The value of the promoter stake and open offer consideration for TCNS is Rs. 1,650 cr for a 51 percent stake, making this one of the largest deals in the Indian fashion space.
Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, “This deal is yet another marker of the Aditya Birla Group’s faith in the dynamism and buoyancy of the Indian consumer economy. As India stands on the cusp of a multi-decadal consumption boom, ABFRL is a forerunner in shaping the fashion landscape of our vibrant nation. For ABFRL, the TCNS deal is indeed a significant milestone as it complements our existing portfolio of exceptional brands across the entire spectrum of Indian fashion.”
Over the last 5 years, ABFRL has built its ethnic portfolio through strategic and calibrated actions. With this acquisition, ABFRL’s ethnic wear portfolio is expected to reach ₹5,000 crore in the next three years.
As part of the transaction, ABFRL will make a conditional open offer to acquire up to a 29 percent stake at ₹503 per share from public shareholders and acquire the remaining stake from the founder promoters to reach an overall shareholding of 51 percent in TCNS. TCNS shares closed at ₹520 a piece on Friday on BSE.
TCNS will be amalgamated with ABFRL under the merger scheme wherein public shareholders of TCNS (as on effective date) will receive 11 shares of ABFRL for every 6 shares they hold in TCNS.
The transaction is subject to customary regulatory approvals from the Competition Commission of India, SEBI, Stock Exchanges, and the National Company Law Tribunal.
