Aditya Birla-Pantaloon deal request axed
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Competition Commission has termed as invalid an application seeking its approval for takeover of Future group's Pantaloon brand business by Aditya Birla Nuvo, as the final deal was yet to be approved by the boards of the concerned companies.
Aditya Birla Nuvo Ltd, part of Kumar Mangalam Birla-led group, through a subsidiary has proposed to acquire a majority Pantaloon format business from Kishore Biyani-led Future group and the concerned parties had sought clearance from the Competition Commission of India (CCI) for the deal on July 16.
In its order dated August 14, 2012, which was posted on its website today, CCI said that the application mentions about "the scheme including the proposal of demerger and merger" being yet to be approved by their boards of the concerned parties.
Both entities, according to the Commission, sought approval based on their Memorandum of Understanding (MoU) for the proposed deal.
As per CCI rules, applications should be made after the boards of the concerned companies' approval for the final deal.
According to the application, the companies in discussions are yet to finalise the exact scope of the assets to be acquired and the share entitlement ratio.
Further, the the terms of the proposed transaction are subject to the agreement by the companies in the scheme and other definitive documents that are to be executed, the order said.
"It is also observed from the terms and conditions in the MoU, that the said MoU is an interim arrangement since it will terminate immediately on execution of the implementation agreement or if the scheme does not get approval from the board of directors of the respective parties," it noted.
In late April, Future Group had said that Aditya Birla Nuvo would infuse Rs 1,600 crore into its flagship 'Pantaloon' and would acquire a majority stake in the store chain, which would be later demerged to be listed as a separate entity.
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