THE BIG MERGER. ‘Both of us wanted to expand… we will do it together’

In the words of Kishore Biyani and Rajan Mittal, their deal is a ‘consolidation of business’, but the structure of the merger has generated debate on who has made a killing – Future or Bharti?

While Future carried the debt baggage, Bharti was dealing with the after-effects of Walmart’s exit. When BusinessLine asked Biyani and Mittal on who is the main beneficiary of this deal, Biyani on a lighter note said, “I think, through this merger, Rajan is making a lot more money than he could have ever made in the retail business!” Edited excerpts:

What was the trigger for this deal?

Kishore Biyani: See, either they (Bharti) could have gone into the business where Rajan would have to immerse himself fully and make it into a ₹20,000-30,000 crore enterprise. Even I would have had to do it in some other way.

So, during the course, we decided that we want to do it together.

Rajan and my ambitions for expanding retail business still remain. But, for Rajan, he is looking at me to fulfil it.

What will be Bharti Group’s role post the merger?

Rajan Bharti Mittal: It’s very clear. The existing management team will be part of the new team. As shareholders, we have always had a role where we will govern and give strategic inputs. The same role will continue in the merged entity also.

The perception is that Bharti will exit the retail business. Will Bharti be part of the promoter group of the merged entities?

Mittal: These are technical matters. But as we have merged and become partners, there is no reason why we won’t be a part of the larger growth story and the vision that Kishore and I would like to present for the new team. Obviously we would be partners in this.

What kind of investments are we talking about? You have a target of 4,000 small stores…

Biyani: It’s too early for us to comment. But we had made a vision and in our journey to achieve that vision, we are bringing in partners. Right now, we will have positive cash flows as the merger will make the balance sheet stronger. We will use this additional cash to fund the expansion.

Post the merger, how do you both expect to shape the retail industry?

Biyani: There are various steps in the journey of any business. We have also acquired something, merged something.

We are working with Godrej, Bharti, Nilgiri’s. I think it is a journey with the ultimate objective to serve your customers, grow your business and improve your balance sheet.

Mittal: The idea behind coming together is to grow. The idea is to get the manufacturing bases that have already been created get more distribution and have more small stores. I think the best of the class must be picked from both sides and apply it where required.

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