-By Ankita Dutta
According to a joint announcement, the Aditya Birla group company has gone into negotiations to buy a 51% investment in TCNS Clothing, that holds ethnic brands like W, Aurelia, Wishful, Folksong, and Elleven.
According to the agreement, it would combine with TCNS Clothing after acquiring the founding promoter’s shareholding through a share purchase agreement (SPA) and a conditional public open offer.
One of the largest deals in the Indian fashion industry, according to the announcement, the promoter stake and open offer consideration for TCNS were valued at Rs 1,650 crore for a 51% stake.
For the fiscal year that concluded on March 31, 2022, TCNS Clothing generated a revenue of Rs 896.05 crore. The company’s goal of developing a thorough fashion portfolio across demographics and price points is supported by the acquisition, it was said. The statement added that the acquisition is also contingent on regulatory approvals from the National Company Law Tribunal (NCLT), SEBI, stock exchanges, and Competition Commission of India (CCI), as well as the required majority of ABFRL shareholders. The purchase should close in 9 to 12 months, according to the company.
According to the aforementioned, “TCNS will be merged with ABFRL under the merger scheme whereby public shareholders of TCNS (as of the effective date) will receive 11 shares of ABFRL in lieu of the 6 shares that they hold in TCNS,” the statement continued. ABFRL stated that it is “at an estimate of Rs 503 per sale shares, subject to adjustments under the SPA” in relation to the cost of acquisition or the price at which the shares are purchased. Furthermore, the “open offer is being made at Rs 503 per equity share, which is being determined in accordance with SAST Regulations,” in accordance to the declaration. According to the open offer, ABFRL “will acquire up to 29 percent of the Extended Share
Capital, subject to Minimum Level of Acceptance,” it was stated.
Aditya Birla Group Chairman Kumar Mangalam Birla commented on the development, stating that for ABFRL, the TCNS transaction is truly an important milestone as it complements its current portfolio of excellent brands spanning the whole spectrum of Indian fashion.
“By embracing the well-liked women’s ethnic brands in TCNS’s portfolio, we are reaffirming our dedication to traditional wear, the biggest segment of the apparel market. The rapidly expanding ABFRL platform is prepared for the following stage of transformational growth with this purchase, he said. Anant Daga, managing director of TCNS, stated, “We have developed India’s most prosperous women’s franchise over the past 20 years on the strength of our strongest brands. We will be able to fully fulfil this potential thanks to our cooperation with ABFRL and the market’s ongoing long-term growth chances.” His statement was followed by the statement that “ABFRL’s proven brand-building ability, distribution strength, and solid community of partners will assist our brands into the next
stage of growth and profitability.”