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Future Consumer Enterprise Ltd., the FMCG arm of Future group, has acquired Nilgiris Dairy Farm Pvt Ltd., the South Indian convenience stores chain for a deal worth INR 300 crore.

Future group financed the whole transaction in an all-cash deal. It took over all shares of Nilgiris including the 65 percent stake Actis Capital held in the chain stores. Actis purchased the stake in 2006 for $65 million but was looking to divest its shares since the past two years.

Future Group also took over the minority stake that the Mudaliar Family- founders- held in the franchise. The deal will help Future Group gain wide geographical access in southern India as it is mainly concentrated in North and West India.

The deal will also help Future Group market its FMCG brands like Tasty Treat, Golden Harvest, CareMate etc in Nilgiris outlets.

"FCEL's acquisition of Nilgiris, a leading food and grocery convenience store chain in South India having a unique portfolio of food brands supported by its own manufacturing facilities for dairy and bakery, is another step towards building a robust convenience stores through franchises in an asset light model as well as brings in new manufacturing capabilities and brands within the company," Kishore Biyani, CEO of Future Group said in a statement.

Proud moment for us to welcome over 100 yr old iconic brand Nilgiris into Future Group family. #FutureGroup #Nilgiris

— Kishore Biyani (@kishore_biyani) November 21, 2014

"This acquisition is synergistic as it enables strengthening and expanding convenience stores through franchises in an asset-light model as well as brings new manufacturing capabilities and brands within the company," Biyani added.

Nilgiris was founded in 1905 and retails a select line of products in its stores. It is predominant in Tamil Nadu, Karnataka, Kerala and Andhra Pradesh and operates more than 140 stores in the metro areas and has a total of 1,405 outlets across the states. Nilgiris also operates eight distribution centers, its own bakery, diary and chocolate brands.

The acquisition is expected to boost Future Group's revenue considerably. Experts said that the acquisition is a part of CEO Kishore Biyani's ambition to generate 20,000 crore in revenue from Future Group's FMCG business by 2020.

"It is a good fit for the Future Group. Nilgiris is present in three states and has a good supply chain in areas such as dairy products. It will help the Future Group's chains like Big Bazaar in terms of sourcing," Arvind Singhal, chairman of Technopak Advisors, told The Business Standard.