Aditya Birla Fashion To Merge With TCNS Clothing In A Deal Worth Rs.1650 Crores

Aditya Birla Fashion, India's top fashion and clothing firm and a member of the Aditya Birla Group, has entered into definitive agreements to merge with TCNS Clothing (TCNS), the country's top player in women's ethnic fashion.

The merger of TCNS with ABFRL will be accomplished through two steps: (1) Acquiring the founding promoter's stake through an SPA and a conditional public open offer; and (2) Merging the two organisations.

One of the largest transactions in the Indian fashion industry, the value of the promoter stake and open offer consideration for TCNS is about Rs. 1650 Crores for a 51% stake.

According to the company's exchange filing on Friday, the deal will be carried out by the acquisition of the founding promoter's stake through an SPA and a conditional public open offer, followed by a merger between the two organisations.

ABFRL said that it will launch a conditional open offer to purchase up to a 29% stake from public shareholders at Rs 503 per share and purchase the remaining stake from the initial promoters to reach a total shareholding of 51% in TCNS.

Mr. Onkar Singh Pasricha, Chairman and Executive Director of TCNS, commented "This deal marks a true milestone for our company and its stakeholders. Under the support and guidance of ABFRL, TCNS will surely achieve even greater heights of success and excellence. We are happy that we have been able to pass on our legacy to one of the most prestigious and respected groups - one that is known for its values, ethics, corporate governance and employee empowerment. We believe that all stakeholders of TCNS will benefit immensely from this landmark transaction."

As a result, TCNS and ABFRL will merge under the terms of the merger agreement, and public TCNS shareholders (as of the effective date) will get 11 shares of ABFRL for every 6 shares they currently own in TCNS.
Speaking on the transaction, Mr. 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. 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."

The ethnic wear portfolio of ABFRL is anticipated to increase with this acquisition to Rs 5,000 crore over the following three years. During FY22, TCNS generated revenues of Rs 896 crore. The company's promoters are Arvinder Singh Pasricha, Onkar Singh Pasricha, Saranpreet Pasricha, and Parmeet Pasricha.

Aditya Birla Fashion & Retail (ABFRL) was established by the Aditya Birla Group in 2015 by the union of the apparel-producing Madura Fashion, the Lifestyle subsidiary of Aditya Birla Nuvo (ABNL), and Pantaloon. The largest publicly traded branded apparel company in the nation reports yearly revenues of roughly Rs. 8,136 crore.

The business operates over 3,200 outlets for names like Peter England, Van Heusen, Allen Solly, and Louis Philippe. Additionally, Pantaloons has 396 other stores. The business also owns the Forever21 clothing line for ladies. The company has also invested in Indian luxury designers like Sabyasachi, Tarun Tahiliani, and Masaba Gupta during the past few years.