The transaction will be carried out through acquisition of the founding promoter’s stake through an SPA and a conditional public open offer followed by a merger between the two entities, ABFRL and TCNS said in a joint press release.

Over the last five years, ABFRL has built its ethnic portfolio through a series of 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 29 per cent stake at ₹503 per share from public shareholders and acquire the remaining stake from the founder promoters to reach an overall shareholding of 51 per cent in TCNS. Pursuant to the above, 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 six shares that they hold in TCNS.

The transaction is subject to customary regulatory approvals including approvals from the Competition Commission of India, Securities and Exchange Board of India (SEBI), Stock Exchanges, and National Company Law Tribunal.

“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. By embracing TCNS’s portfolio of loved women’s ethnic brands, we are reinforcing our commitment to ethnic wear, the largest category in the apparel industry. With this acquisition, the fast-growing ABFRL platform is poised for the next phase of transformational growth,” said Kumar Mangalam Birla, chairman, Aditya Birla Group.

“As young Indians identify a new-found confidence in their identities woven around Indian culture and heritage, the next set of leading consumer brands will be built in the Indian ethnic wear space. TCNS, through its brands W, Aurelia, Wishful, Folksong, and Elleven, is catering to the Indian women’s fashion needs across markets and price points. Each of these brands have been built over a long period of time and enjoy tremendous consumer love. This transaction is a pivotal piece of our strategy of building India’s most comprehensive ethnic wear portfolio,” said Ashish Dikshit, managing director, ABFRL.

“TCNS has been a pioneer in branded women’s ethnic wear market in the country. Over the last 20 years, we have built India’s most successful women’s franchise on the back of our leading brands. The market continues to offer long-term growth opportunities and our partnership with ABFRL will help us fully realise this potential. ABFRL’s proven brand-building capability, distribution strength, and strong ecosystem of partners will help our brands into its next phase of growth and profitability,” said Anant Daga, managing director of TCNS.

Fibre2Fashion News Desk (NB)