Aditya Birla Fashion to buy 51% stake in TCNS Clothing
The value of the promoter stake and open offer consideration for TCNS is Rs 1,650 cr
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Mumbai: Aditya Birla Fashion and Retail Ltd (ABFRL) will acquire a controlling stake in TCNS Clothing, the owner of leading ethnic brands W, Aurelia, Wishful, Folksong, and Elleven.
The transaction will be carried out through the acquisition of the founding promoter's stake through a SPA and a conditional public open offer followed by a merger between the two entities, the company said in an exchange filing.
The value of the promoter stake and open offer consideration for TCNS is Rs 1,650 crore for a 51 per cent stake, making this one of the largest deals in the Indian fashion space
As part of the transaction, ABFRL will make a conditional open offer to acquire up to a 29 per cent stake at Rs 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.
Talking to Bizz Buzz, Rahul Mehta, Chief Mentor, CMAI (Clothing Manufacturers’ Association of India) said, “This acquisition by ABFRL will bring a significant increase in the company's share in the ethnic wear segment, in which it already has some top of the line brands.”
Brands such as W and Aurelia have established a strong presence in the domestic market, and the tie up with ABFRL will further expand its outreach. I believe it is a win-win move for both ABFRL and TCNS Clothing, he said.
Pursuant to this, TCNS will be amalgamated with ABFRL under the merger scheme wherein public shareholders of TCNS (as of effective date) will receive 11 shares of ABFRL for every 6 shares that they hold in TCNS.
The acquisition comes at a time when ABFRl has been expanding its ethnic and occasional wear portfolio aggressively. In the past few years, the company has also acquired stakes in Indian luxury designers like Sabyasachi, Tarun Tahiliani, Masaba Gupta, among others.
With this acquisition, ABFRL's ethnic wear portfolio is expected to reach Rs 5,000 crore in the next three years.
Kumar Mangalam Birla, Chairman of 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.
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," he said.
TCNS, which sells ethnic brands W, Aurelia, Wishful, Folksong and Elleven, clocked a turnover of Rs 896 crore in FY23.
Arvinder Singh Pasricha, Onkar Singh Pasricha, Saranpreet Pasricha & Parmeet Pasricha are promoters of the company. Anant Daga, Managing Director of TCNS said the company 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, he added. The market continues to offer long-term growth opportunities and our partnership with ABFRL will help us fully realize 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.
The transaction is subject to customary regulatory approvals including approvals from the Competition Commission of India, SEBI, stock exchanges, and National Company Law Tribunal.
