Kishore Biyani’s Future Retail Limited (FRL) has made a filing for approval with the Competition Commission of India for the acquisition of HyperCity Retail India, said AZB & Partners senior partner Ashwath Rau, who advised FRL for the deal.
FRL agreed to purchase HyperCity for ₹6.5 billion (US$99 million) from Shoppers Stop and its parent K Raheja Corp. The company executed a share purchase agreement (SPA) for acquisition of the target’s entire share capital. Rau said a detailed due diligence was conducted prior to the SPA, but could not disclose further details.
When asked for advice for lawyers similarly involved in executing SPAs, Rau said, “No SPA is perfect. Deal making depends on achieving a fair balance whilst protecting your client.”
“The key is to ensure that risks identified in diligence are addressed through the SPA, by way of conditions precedent, covenants, representations, warranties and indemnities. Achieving complete process clarity is important with steps prior to, at and after closing, modalities for share transfer, changes to board, transition support from the seller, branding, long stop date [and] rules governing sharing of confidential/competitive info pre-closing.”
Rau led the deal on behalf of AZB and was supported by counsel Prerak Ved and associates Nirmal Mahtani and Karishma Muravne. HyperCity is a supermarket chain with 19 stores largely in prime locations in major cities with products in the food, home and fashion segments.
Shoppers Stop owns a 51% stake in HyperCity, while parent K Raheja Corp holds the rest. The company opened doors in 2006, but posted a net loss of ₹400 million in the latest fiscal year. The acquisition is expected to be completed in three to five months and to result in further consolidation of FRL’s retail business in Hypercity’s segments.