Amazon is reportedly collaborating with Goldman Sachs and Indian private equity firm Samara Capital to jointly acquire Aditya Birla Group’s ‘More’ supermarket chain. Sources cite that the deal worth Rs. 4500 to Rs. 5000 crores would target prominent competitors like Walmart and Reliance.
The move comes as a response from Amazon to Walmart’s attempts to take over the rapidly growing Indian online retail business. As per the industry experts, the acquisition of More, the fourth largest supermarket chain in India, would strengthen Amazon’s stance against Walmart, its biggest competitor in the food and grocery business.
Walmart, which recently announced the $16 bn acquisition of India based online retailer, Flipkart, is one of the strongest contenders in the Indian grocery market.
For the record, Amazon as a part of its expansion strategy in Indian Food retail business, especially the groceries sector has planned an approximate investment of $500 million in the industry.
An exclusivity agreement was signed between Samara Capital and Aditya Birla Retail Ltd in June for bilateral negotiations. Later, Samara reached out to Goldman Sachs and Amazon to jointly invest their funds in a combined deal to purchase the supermarket chain from Aditya Birla Group for approximately Rs. 4300 crores, cite trusted sources.
Reportedly, Goldman Sachs Special Situations Group will be the vehicle for this transaction within the investment bank. The collaboration is looking to float a separate company where Amazon will be holding a 49% stake as a strategic partner.
Sources aware of the development stated that a final structuring exercise is in progress and a formal announcement would most probably be made by the end of August or in the beginning of September.
None of the firms among Amazon, Samara Capital, and Aditya Birla Group have publicized or disclosed any details regarding the deal yet.