Amazon, the US e-commerce major, is buying More — the food and grocery retail chain of the Aditya Birla group — in association with home-grown private equity firm Samara Capital for an enterprise value of Rs 4,200 crore.

The acquisition will be done by an entity in which an investment arm of Amazon will hold a stake. Samara will hold 51 per cent in the entity, while Amazon will have the rest.

Amazon’s latest acquisition adds more heat to its battle with Walmart in the Indian market, after the latter acquired Flipkart for $16 billion earlier this year.

It was in 2007 that the Aditya Birla group ventured into food and grocery retail segment with the acquisition of Trinethra Super Retail.

Aditya Birla Retail Ltd (ABRL) subsequently expanded its presence under the More brand with two formats — supermarkets and hypermarkets. At present, there are close to 525 supermarkets and 20 hypermarkets, most of which are located in the south.

RKN Retail Pvt Ltd, a holding company from the Aditya Birla group, on Wednesday said its board had approved the sale of its entire shareholding in Aditya Birla Retail. This comprises 1,97,22,22,430 equity shares, or 62.19 per cent of the paid up capital of ABRL. These shares have been sold to Witzig Advisory Services Pvt Ltd (Witzig) that is owned and controlled by Samara Alternative Investment Fund.

The statement added that another group firm — Kanishtha Finance and Investment Pvt Ltd — is also selling its stake in ABRL to Witzig. Their combined stake stands at 99.99 per cent.

While the statement was silent on whether Amazon will also be involved in the transaction, it is learnt that an investment arm of the US-based retail giant will acquire up to 49 per cent in Witzig.

For Kumar Mangalam Birla, the transaction will eliminate the entire debt of ABRL. More is the country’s fourth largest super market chain. This is not for the first time that Amazon is targeting the domestic brick-and-mortar retail space.

Last year `Amazon.com` NV Investment Holdings LLC, an investment arm of Amazon.com, had picked up a 5 per cent stake in Shoppers Stop for Rs 179.26 crore. Shoppers Stop had then said it would issue five per cent of its post-issue share capital to `Amazon.com` NV Investment Holdings LLC, which is a limited liability company incorporated in the US and registered as a category III foreign portfolio investor with the Securities and Exchange Board of India.

Extant norms allow 51 per cent foreign direct investment in multi-brand retail.

So far Amazon has invested almost $4 billion in its Indian operations. Regulatory filings sourced from business intelligence platform paper.vc showed that the India operations received a capital infusion of Rs 2,700 crore from its parent.