Aditya Birla's Acquisition of Trinethra*

            


Details

Case Code : CLBS052
Publication date : 2008
Subject : Business Strategy
Industry : -
Length : 04 Pages
Price : Rs. 50

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Key words:

Aditya Birla Retail, Aditya Birla Group, Trinethra Super Retail, India Value Fund, Acquisition, Retail segment, Fabmall, Quality First, Multi-format retailing, Reliance Fresh, Bharti Enterprises, Wal-Mart Stores Inc, Woolworths Stores Inc., Tata Infinity Retail, Croma, Inorganic growth, Organized retail


* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

 


Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

This caselet discusses the acquisition of Trinethra Retail by Aditya Birla Retail. The Trinethra brand had considerable strength, and the chain was one of the fastest growing retail companies in South India. The acquisition was expected to prove advantageous to the Aditya Birla Group as it would give the Group ready access to the booming retail market in India. Traditionally, organized retail formed a very small part of the retail segment in India. However, this was changing as disposable incomes increased and Indian consumers became exposed to western shopping habits. Therefore, many large groups and companies like the Reliance Group, the Tata Group and Bharti Enterprises, saw considerable potential in the market and launched their retail plans in 2006, some in partnership with global retailers like Wal-Mart and Woolworth Limited.

Issues:

 » Industry analysis.
 » Competition.
 » Growth Strategy.
 » Mergers and Acquisitions.

Introduction

On January 3, 2007, Aditya Birla Retail (AB Retail), an unlisted subsidiary of the Aditya Birla Group, acquired a majority stake in Trinethra Super Retail Limited (Trinethra), marking the Group’s entry into the Indian retail sector. AB Retail acquired 90% of the shareholding in Trinethra. The other 10% remained with India Value Limited, a private equity investment fund that had been the majority shareholder in Trinethra before the acquisition...


Questions for Discussion:

1. Critically analyze Aditya Birla Retail's decision to acquire Trinetra. What, according to you, were the potential benefits and pitfalls?

2. Do you think the acquisition will help the group in becoming one of the leading players in the Indian retail industry? Give reasons for your answer.

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