Future, Bharti group merge retail business to create biggest network
Sanjeev Sharma
Tribune News Service
New Delhi, May 4
Kishore Biyani’s Future Retail and Bharti Retail today announced a merger of their businesses, creating one of the largest retail chains in the country with a footprint of over 570 retail stores in multiple formats across 243 cities, including in the states of Punjab and Haryana.
The announcement comes just a day after the Aditya Birla group announced a major consolidation by merging its apparel businesses into a Rs 5,290-crore entity named Aditya Birla Fashion and Retail (ABFRL), which will be the largest pure-play fashion lifestyle company in the country. Shares of Pantaloons Fashion & Retail and Aditya Birla Nuvo today gained up to 20%, a day after the announcement.
The merger between Future Group and Bharti combines two entities to create a larger footprint, better profitability and cost optimisation as advantages.
Future Group has been a pioneer in the Indian retail sector and operates over 17 million square feet of retail space in different formats and categories across 166 Indian cities.
Bharti Retail currently operates a network of over 200 Easyday stores in multiple formats across 114 cities with a strong presence in key markets like Punjab, Haryana, National Capital Region, western Uttar Pradesh, Uttarakhand and Bangalore.
The combined entity will have over 570 retail stores in 243 cities with operational retail space of over 18.5 million square feet. It will operate 203 Big Bazaar and Easyday hypermarkets, 197 Food Bazaar and Easyday supermarkets, and 171 other stores comprising Home Town, eZone, FBB and Foodhall.
Commenting on the proposed partnership, Kishore Biyani, founder and Group CEO, Future Group, said, “Bharti Retail’s strengths and network compliment perfectly with that of Future Retail. It will bring us closer to millions of consumers and provide new opportunities for our supply partners. The operational efficiencies that can be derived from the merger will create significant value for our shareholders.”
Rajan Bharti Mittal, vice-chairman, Bharti Enterprises, said, “The partnership offers synergies in terms of reach, efficiency and experience to build a world-class retail network to serve the Indian consumer. Retail is emerging as the next big growth engine for India and we will be well positioned to be a major player in this growth story.”
To streamline the operations resulting from this consolidation, the Board of Directors of Future Retail and Bharti Retail have proposed a demerger of the retail business of Future Retail to Bharti Retail, and a demerger of the infrastructure business of Bharti Retail to Future Retail. After the demerger becoming effective, the business will be operated through two distinct entities.
The first entity, to be known as Future Retail Limited post the completion of the demerger, will host the retail operations of both the entities.
The second entity, to be known as Future Enterprises Limited post the completion of the demerger will host the infrastructure, investments and assets of both the companies.
