Future Retail and Bharti Retail announce merger

Within a day of aditya Birls Nuvo merging Pantaloons to create the largest branded apparel maker, Kishore Biyani-promoted Future Retail and Bharti Group retail arm Bharti Retail today announced the merger of their retail businesses to create a national footprint of over 570 retail stores in multiple formats across 243 cities.

The boards of directors of Future Retail Limited, the flagship company of the Future Group, and Bharti Retail Limited today approved a partnership between the companies, to create one of India's foremost retail networks in India's fast growing consumer economy.

The partnership will combine and realign the operations of Future Retail and Bharti Retail.

As part of the new arrangement, Future Retail's retail arm will be merged into Bharti Retail while the retail infrastructure undertaking of Bharti will be merged into Future Retail. The process will also reorganise the paid-up share capital of Bharti Retail.

The consolidation process will result in the creation of two distinct entities - one focused on retail operations and the other holding the infrastructure and investment, the two said in a release.

''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 and the second entity, to be known as Future Enterprises Limited, which will host the infrastructure, investments and assets of both the companies.''

Post consolidation, the shareholders of Bharti Retail and Future Retail will be shareholders in each of the entities. The consolidation and the demerger are subject to approvals of shareholders, the  High Court of Bombay, the Competition Commission of India, the stock exchanges and other regulatory bodies, the release added.

The combined entity will benefit from efficiencies of scale, sourcing, data and insights to deliver great experience and value to consumers, Future Group said in a release. 

Future Group, a pioneer in the Indian retail sector, 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 of Home Town, eZone, FBB and Foodhall, according to the release.

''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,'' Kishore Biyani, founder and group CEO of Future Group, said.

''We are delighted to announce this partnership, which brings together the strengths of the two companies and provides a strong platform for future growth. The partnership offers compelling synergies in terms of reach, efficiency and experience to build a truly world-class retail network to serve the Indian consumer,'' Rajan Bharti Mittal, vice chairman of Bharti Enterprises, said.

''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,'' he added.