The Competition Commission of India (CCI) has approved the `1,500-cr Flipkart-Aditya Birla Fashion deal, giving a leg-up to the online fashion retail business of the Walmart Inc.-owned company.
“Commission approves acquisition of a 7.8 percent minority stake in Aditya Birla Fashion and Retail Ltd by Flipkart Investments Private Ltd,” India’s antitrust regulator said in a report.
The Flipkart-ABFRL deal, announced in October 2020, will give much-needed capital to Aditya Birla Fashion Retail Ltd., at a time when the pandemic kept its stores closed and offices shut for most of last year. The company operates Pantaloons and is the owner of oice-wear brands such as Allen Solly and Peter England. ABFRL, which has a network of 3,004 stores, plans to use the funds to strengthen its balance sheet, scale up existing businesses and increase its presence in emerging high-growth categories such as innerwear, athleisure, casual and ethnic wear. “Through this transaction with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country,” Flipkart Group CEO Kalyan Krishnamurthy had said while announcing the deal.
Flipkart’s move to acquire stakes in online fashion retailers is part of its broader strategy of expanding operations and leveraging strategic partnerships to keep cost structures lean in an increasingly competitive environment. In July last year, Flipkart Group acquired a significant minority stake in Arvind Fashions’ subsidiary Arvind Youth Brands for `260 cr.
