Mukesh Ambani-led Reliance Industries (RIL) is in talks to buy centuries-old British toy retailer Hamleys as the company expands its presence in the consumer space. RIL's retail arm Reliance Retail has the licence to sell Hamleys' products in India. Sources said RIL is said to be aggressively pursuing the deal and due diligence for buy-out is in advanced stages. RIL, however, declined to comment on the issue. A company spokesperson said, “As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis.”
China's C.banner International had acquired the British company in a £100 million deal in 2015. In October last year, it was reported that the Chinese company, which is listed on the Hong Kong Stock Exchange, had launched a strategic review of loss-making Hamleys and was looking to sell it. Hamleys was founded in 1760. In the past few years, RIL has been diversifying beyond its core business of refining & petrochemicals and has emerged as a strong player in the telecom and retail businesses. Reliance Retail reported an over two-fold jump in its pre-tax profit to £168 million for the December 2018 quarter.
Meanwhile, RIL also plans to get into the e-commerce space and intends to launch an online shopping platform to take on Amazon and Flipkart. Saudi Aramco, the world's most profitable company in history, is said to be in early discussions to acquire up to 25 per cent in the refining and petrochemicals businesses of Reliance Industries Ltd. The company is said to have shown interest in Reliance and talks gathered momentum following the visit of Saudi Crown prince Mohammed bin Salman (MBS) to India in February, during which he met RIL chairman Mukesh Ambani.
A minority stake sale could fetch around $10-15 billion, valuing RIL's refining and petrochemicals businesses at around $55-60 billion. Storied investment banker, Goldman Sachs, is said to have been mandated to advise on the proposed deal. A highly-placed person in the financial sector said, “RIL has grown too big, from energy to retail to telecom. It needs to compartmentalise. It makes sense to spin off some of its verticals. It'll help raise funds and unlock shareholder value.”
Sources also said RIL would likely look at creating a standalone vertical for its downstream businesses, refining and petrochemicals, in which Aramco would participate. This is somewhat similar to BP's deal to buy a $7 billion stake in RIL's upstream natural gas and exploration businesses in 2011. In February, Aramco said it and Indian state oil companies were planning to build a greenfield refinery on the west coast in Maharashtra with a 1.2 million-pound bpd capacity.
