Aditya Birla Fashion and Retail shares surge 5% after it announces to take over Reebok's operations in India

Aditya Birla Fashion and Retail Ltd (ABFRL) shares surged over 5 per cent to Rs 280.90 per share on the BSE in Tuesday's intraday trade. The upswing in the fashion and retail brand share price came on the back of news that Aditya Birla Fashion and Retail will be taking over Reebok's operations in India. This was confirmed by Aditya Birla Fashion and Retail through an exchange filing on Tuesday.  

The objective of the acquisition is to expand Aditya Birla Fashion and Retail's business into the sports lifestyle segment, the company said

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The retail company in its statement said the Board of Directors of the company in its meeting held on Tuesday has approved acquiring the exclusive online and offline rights to the global brand 'Reebok' for the Indian market.  

"Please be informed that the Board of Directors of the Company, at its meeting held today has in-principally approved acquiring the exclusive online and offline rights to the global brand 'Reebok' for the Indian market and purchase of certain assets of 'Reebok India Company' including inventory, currents assets/liabilities by way of entering into a Licensing Agreement and a Purchase Agreement, respectively, " said Aditya Birla Fashion and Retail in a press release.  

It said the transaction will be effective upon the completed transfer of global ownership of 'Reebok' Brand from Adidas to Authentic Brand Group, US and is subjected to signing of definitive agreement(s) and necessary statutory approvals, if any.

ABFRL operates more than 3,000 stores in India and is the exclusive retailer for Forever 21, American Eagle Outfitters and Ralph Lauren branded clothes, among others, in the country.

At round 1 pm, Shares of Aditya Birla Fashion and Retail were trading over 5 per cent or Rs 14 higher at 280.05 on the BSE in Tuesday's intraday trade.