Friday, November 21, 2014

Merger and Acquisition :Future Group acquires supermarket chain Nilgiris

Nilgiri























Deal size expected to be between Rs 175 to Rs 200 crore

Kishore Biyani-led Future Consumer Enterprise (FCE) today said it has bought a 97.97% stake in Bangalore-based supermarket chain Nilgiris from UK-based private equity firm Actis. 
 
Though the company did not disclose the deal value, it is believed to be between Rs 175 crore and Rs 200 crore. 
 
With this deal, The Nilgiri Dairy Farm, the retailer's operating company, has become a subsidiary of FCE.
 
Set up in 1905, Nilgiris is majority owned by Actis. Promoted by the Mudaliar family, Nigiris became a portfolio of Actis when the latter bought 65% stake in 2006 for $65 million and subsequently increased its stake. Actis has been looking to exit the investment since 2012.
 
The acquisition is expected to help in multiple ways. Foremost, it will help the group expand its presence in the South and compete with retailers like Aditya Birla  that have a stronger presence there. Currently, Future Group is predominantly West and North focused.

Nilgiris runs 140 stores in Karnataka, Kerala, Tamil Nadu and Andhra Pradesh.

Future Group said the deal will help expand its existing footprint of convenience stores via a franchise model. 
 
"With this acquisition, the company expects to expand geographically by increasing its footprint of convenience stores in south India," FCE said today.
 
Future Consumer Enterprises’ existing portfolio of brands including Sunkist, Tasty Treat, Golden Harvest, Premium Harvest, Sach Ektaa, CleanMate and CareMate, will be retailed through Niligiris network. Also, Niligiris' branded bakery and dairy products will be retailed across Future Group’s existing channels including Big Bazaar, Foodhall and Aadhaar and also extended to other modern retailers.
 
Kishore Biyani, Group CEO, Future Group, said, “This acquisition is synergistic as it enables strengthening and expanding convenience stores through franchises in an asset light model as well as brings in new manufacturing capabilities and brands within the company.”
 
Future Group has convenience stores under KB's FairPrice. It is not known whether it will rename Nilgiris into Kb's FairPrice.

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