As the race for expansion in India continues, Amazon is starting to build an alliance with Goldman Sachs and Indian company Samara Capital for the buyout of Aditya Birla Group’s More supermarket chain at an enterprise value of Rs 4,500 – 5,000 crore.
The news came after Walmart completed its acquisition of online retailer Flipkart to the tune of $16 billion.
According to those privy to discussions between the three companies, Samara signed an exclusivity agreement with Aditya Birla Group at the end of June, then the former reached out to Goldman Sachs and Amazon to join forces.
The consortium plans to create a separate company that will buy More, with Amazon receiving a 49% stake as the strategic partner.
The game plan is actually in conformity with India’s foreign investment laws which permit foreign companies to hold only up to 49% in multi-brand retailers.
Why does Amazon want More?
More is India’s fourth-largest supermarket chain operator behind Reliance Retail, DMart and Future Group, so it can help strengthen Amazon’s physical retail presence in the country.
The online retail giant has already invested $500 million in a subsidiary in India that sells packaged food.
If the deal with More pushes through, it’s going to be Amazon’s second direct investment in the country’s physical retail space.
Amazon’s corporate communications team in India refused to comment on this issue, and neither did Goldman Sachs and Samara Capital.
It certainly seems like India is the new battleground for the eCommerce giants. This past week or two has been filled with news about different acquisitions and partnerships emerging in the region.
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