Kishore Biyani-promoted Future Retail Ltd.'s board has approved the consolidation and realignment of its retail operations with Bharti Retail Ltd., a statement by the company said here on Monday.
"The board of directors of Future Retail Limited, the flagship company of Future Group, and the board of directors of Bharti Retail Limited at their respective meetings held today (Monday) have approved a partnership between the companies," the statement by Future retail said.
"To streamline the operations resulting from this consolidation, the board of directors of Future Retail and Bharti Retail have proposed a demerger of the retail business of Future Retail to Bharti Retail and a demerger of the infrastructure business of Bharti Retail to Future Retail," it added.
The first entity, to be known as Future Retail Limited (proposed) post the completion of the demerger, will host the retail operations of both the entities.
The second entity, to be known as Future Enterprises Limited (proposed) post the completion of the demerger, will host the infrastructure, investments and assets of both the companies, the statement said.
After the consolidation, the shareholders of Bharti Retail and Future Retail would be shareholders in each of the entities.
The combined entity will have over 570 retail stores in 243 cities with operational retail space of over 18.5 million square feet.
Future Group operates over 17 million square feet of retail space in different formats and categories across 166 Indian cities.
Bharti Retail currently operates a network of over 200 Easyday stores in multiple formats across 114 cities with a strong presence in key markets like Punjab, Haryana, National Capital Region, western Uttar Pradesh, Uttarakhand and Bengaluru.
The combined entity will operate 203 Big Bazaar and Easyday hypermarkets, 197 Food Bazaar and Easyday supermarkets, and 171 other stores comprising Home Town, eZone, FBB and Foodhall.
"Bharti Retail's strengths and network compliment perfectly with that of Future Retail. It will bring us closer to millions of consumers and provide new opportunities for our supply partners," said Kishore Biyani, founder and group chief executive officer, Future Group.
"The operational efficiencies that can be derived from the merger will create significant value for our shareholders."
"The partnership offers compelling synergies in terms of reach, efficiency and experience to build a truly world-class retail network to serve the Indian consumer. Retail is emerging as the next big growth engine for India and we will be well positioned to be a major player in this growth story," Rajan Bharti Mittal, vice chairman, Bharti Enterprises, said.
At 3.11 p.m. Future Retail's shares were trading at Rs.128.85 per share, up 11.37 percent, in the Bombay Stock Exchange.