CCI authorises Aditya Birla Fashion and Retail Limited’s acquisition of TCNS Clothing

According to a CCI statement, the proposed combination comprises the acquirer Aditya Birla Fashion and Retail Limited (acquirer) acquiring 51% of the increased share capital of the target TCNS Clothing Co. Limited (target).

The Aditya Birla Fashion and Retail Limited (ABFRL) acquisition of TCNS Clothing Co. Limited has been approved by the Competition Commission of India (CCI). According to a CCI statement, the proposed combination comprises the acquirer Aditya Birla Fashion and Retail Limited (acquirer) acquiring 51% of the increased share capital of the target TCNS Clothing Co. Limited (target).

ABFRL is a publicly traded company that is part of the Aditya Birla group of enterprises. It sells branded products in areas such as clothes, footwear, and accessories through its retail locations, online retail platforms, and e-commerce marketplaces. 

TCNS Clothing is also a publicly traded company that manufactures, distributes, and sells women’s apparel, jewellery, footwear, and other beauty goods under the trademarks W, Aurelia, Wishful, Elleven, and Folk Song. The company’s portfolio also includes wholesale cash and carry trading (including product sales through franchisee outlets).

ABFRL announced earlier this year that it had entered into a final deal to purchase a 51% share in TCNS Clothing. According to ABFRL, the value of the promoter share in TCNS is Rs 1,650 crore for the 51% stake. This is a cash-and-equity transaction. “This transaction demonstrates the Aditya Birla Group’s confidence in the dynamism and buoyancy of the Indian consumer economy.” “The TCNS deal is a significant milestone for ABFRL because it complements our existing portfolio of exceptional brands across the entire spectrum of Indian fashion,” said Kumar Mangalam Birla, Chairman of Aditya Birla Group, in a statement. 

ABFRL reported its fourth quarter results for FY 2022-23 in May, reporting a loss of Rs 186.94 crore in the fiscal fourth quarter, compared to a profit of Rs 43.59 crore in the same quarter last year. “The quarter’s net profit was impacted by negative operating leverage as a result of sluggish sales.” “The increase in marketing spends (1.5 times LY) and continued investments in TMRW also had an impact on profitability in the quarter,” the company stated in a regulatory statement. ABFRL further stated that the market observed a gradual lowering of demand after October, with the value category suffering the most.