Anil Dhirubhai Ambani Group (ADAG) on the acquisition trail, acquires 8.68% stake in Trent Ltd, buys 15% stake in a new international airport in central Kerala

Reliance Capital Trustee, of the ADAG group of companies, reported that it had acquired 8.68% stake in Trent Ltd for an estimated Rs 21.2 crore. The move comes as ADAG’s introductory foray into the Indian retail sector. In the deal, the cumulative compulsorily convertible preference shares of Trent were purchased by Reliance Capital Asset Management via various mutual fund series, inclusive of Reliance Equity Linked Saving Fund Series-I, Reliance Dual Advantage Fixed Tenure, Reliance Equity Opportunities Fund and the Reliance Tax Saver Elss Fund.

The acquisition target, Trent Ltd, is one of the foremost retailers in India and is part of the larger Tata Group. Begun in 1996, Trent Ltd was initially named LAKME Ltd but later moved its cosmetic business and its subsidiary to Lakme Lever Ltd, a joint venture with Hindustan Lever Ltd.  From thence, the firm has grown, acquiring Littlewoods International (India) Pvt Ltd in 1998. The merged entity from the Littlewoods acquisition was thus renamed Trent Ltd.

Trent Ltd is owner and controller of Westside stores, a chain of department stores spread all over India and is currently keen on expanding its presence in the hypermarket segment via its Star India Bazaar model. Trent also does business in the books and music retailing segment via its subsidiary, Landmark Ltd.  Early this year, Trent raised $22 million, about Rs 100 crore via a private placement of secured redeemable non-convertible debentures.

ADAG’s move for Trent Ltd comes months after the billionaire Ambani brothers agreed to nullify a non-compete agreement, subsequently allowing each other to enter in areas that were before then disallowed due to a family settlement that was entered into in 2006 to solve disputes between the two brothers. Both brothers are going into diversified business including those where they were earlier prevented from entering each other’s businesses.

Other than the Trent acquisition, ADAG also announced the acquisition of a 15% stake in a new international airport coming up at Aranmula in Pathanamthitta district of central Kerala for Rs.225 crore.  The investment, entered into a few months ago, was concluded through one of the group's smaller investment companies at Rs.486 per share.

The airport is the first private sector airport in Kerala at an investment of Rs.2,000 crore and is promoted by KGS Aranmula Airport Limited which will be situated in the Sabarimala hills. The airport is scheduled to be fully operational by December 2012.

6 Sep 2010.