India's Aditya Birla Fashion and Retail Ltd (ABFRL) said on Tuesday it would buy exclusive rights to sell global sportswear brand Reebok's products both online and offline in the Indian market.
Shares of ABFRL jumped 4.6% to 279 rupees after the announcement.
The deal will be effective once the global ownership of the Reebok brand is transferred from Adidas to Authentic Brands Group under a 2.1 billion euros ($2.37 billion) acquisition announced in August.
Major Indian fashion retailers have gone on a shopping spree for big brands this year, aiming to strengthen their positions in one of the country's fastest growing segments. ABFRL picked up a 51% stake in luxury wedding wear brand Sabyasachi, while rival Reliance Industries Ltd's retail unit bought 52% of designer label Ritu Kumar.
ABFRL said the transaction also includes buying certain assets of Reebok India Company, including inventory, current assets and liabilities. It added that the long-term licensing deal gave it exclusive rights to sell Reebok products in India and other Southeast Asian countries.
The company expects to spend around 750 million rupees ($9.88 million) to 1 billion rupees ($13.17 million) to buy Reebok's inventory and other current assets and liabilities.
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.