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India´s regulator approves Flipkart's minority stake acquisition in ABFRL

By Angela Gonzalez-Rodriguez


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The Competition Commission of India (CCI) approved on Wednesday Flipkart’s acquisition of a minority stake in Aditya Birla Fashion and Retail Ltd (ABFRL). India´s e-commerce giant Flipkart proposed to acquire 7.8 percent stake in ABFRL through its wholly-owned subsidiary Flipkart Investments Private Ltd (FIPL).

Conversely, in October last year, Aditya Birla Fashion’s board had approved plans to issue a 7.8 percent stake on a preferential basis to Walmart-owned Flipkart Group. After the dilution of the 7.8 percent stake, the promoter and promoter group companies of ABFRL will hold around 55.13 percent stake.

ABFRL intends to use the proceedings to “strengthen the company’s balance sheet and accelerate its growth”, according to a corporate release issued jointly by the two companies. Notably, the deal provides Flipkart rights such as pre-emption rights and right of first refusal for a period of 1-5 years from the date of allotment of equity shares, or if the equity shareholding of the investor falls below a certain threshold, along with a board seat.

This is a non-exclusive deal, what means that Aditya Birla Fashion could continue to have its own online presence as well as work with other platforms.