The board of directors overseeing Future Group’s retail arm has approved a proposed plan to acquire and consolidate the retail and allied businessesof Heritage Foods.
The move would see the Heritage Fresh retail chain become part of Future Retail's growing network of stores.
As part of the deal, Heritage Foods will assume a 3.65 per cent shareholding in Future Retail, through a fresh issuance of shares by the company. In return, Heritage Foods will spin off its retail, bakery, agri‐sourcing and veterinary care business into a fully owned subsidiary. Subsequently, all these businesses, except veterinary care, will then be merged with Future Retail.
The deal is subject to approval from relevant regulatory authorities and shareholders of both companies.
Heritage Fresh has emerged as a popular retail brand in southern India, serving over 24m customers annually. The chain of 124 small format stores in Hyderabad, Bangalore and Chennai sells a wide range of household items, including fresh fruits and vegetables.
“We are happy to have found a partner in Future Group to expand our retail business, as Heritage Foods continues to focus and expand its dairy and renewables energy business,” N Brahmani, executive director of Heritage Foods, said. “Heritage stores are now part of a larger retail network and will benefit from economies of scale and supplier relationships that are critical in modern retailing.”
Future Retail’s chairman and managing director, Kishore Biyani, said the Heritage Fresh stores would compliment the Future’s existing network of 379 small format EasyDay stores in northern India. Future Retail also operates 232 large format Big Bazaar stores across the country.
“The consolidation of Heritage small format stores brings us closer to the homes of customers in the three key metros in Southern India,” Biyani explained. “Scale plays an important role in retail and this forms part of our strategy of aggressively expanding our small stores network to around 3000 stores nationally by 2021, to service daily and weekly needs of customers, even as Big Bazaar focuses on delivering value and catering to the monthly consumption basket of urban India.”
