The owner of ethnic brands such as W, Aurelia, Wishful, Folksong, and Elleven, TCNS Clothing, has gone into binding agreements to be acquired by Aditya Birla Fashion and Retail (ABFRL). There will be two parts to this transaction. The initial promoter’s stake will first be acquired by ABFRL through an SPA and a conditional public open offer. The two organisations will then merge after this.  One of the largest transactions in the Indian fashion industry, the value of the promoter holding and open offer consideration for TCNS is 1,650 crore for a 51% stake.

“This deal is yet another indicator of the Aditya Birla Group’s faith in the dynamism and buoyancy of the Indian consumer economy,” said Kumar Mangalam Birla, Chairman of the Aditya Birla Group. ABFRL is a pioneer in reshaping the fashion scene in our lively country as India prepares for a multi-decade consumption boom. The TCNS purchase is a big milestone for ABFRL since it expands our already impressive portfolio of top brands in every segment of Indian fashion.

ABFRL has developed its ethnic portfolio over the past five years by taking calculated, deliberate steps. The ethnic wear portfolio of ABFRL is anticipated to grow to 5,000 crore with this acquisition over the following three years. In order to obtain a total shareholding of 51% in TCNS, ABFRL will make a conditional open offer to purchase up to a 29 percent stake from public shareholders at a price of 503 per share. The remaining stake would be purchased from the founder promoters. On Friday, TCNS shares on the BSE reached a close of 520.

Under the terms of the merger agreement, TCNS and ABFRL will be combined. As of the merger’s effective date, TCNS’s public shareholders will get 11 shares of ABFRL for every 6 they now own of TCNS. The acquisition is subject to the standard regulatory approvals from the National Company Law Tribunal, SEBI, the Competition Commission of India, and stock exchanges.