MUMBAI Reliance Industries (RELI.BO), has bought a stake in Indian freight services firm Deccan 360 in a deal to help boost the retail operations of India's top listed conglomerate.
Deccan 360's chairman said Reliance's share was between 26 and 50 percent, while a source familiar with the matter said the company paid $20 million to $30 million for the stake.
For Reliance, controlled by billionaire Mukesh Ambani, it is the second acquisition in as many weeks as it looks to grow new businesses. The purchase would boost the supply chain and logistics operations for Reliance's retail business, a source familiar with the company's plans said.
Reliance Retail, a unit of Reliance Industries, operates 900 multi-format stores in 80 cities across India, offering products from apparel to furniture.
Deccan 360 is owned by G.R. Gopinath, who founded India's first budget airline Air Deccan and later sold it to billionaire Vijay Mallya-controlled UB Group's Kingfisher Airlines (KING.BO) in 2007.
Deccan 360, which also has 300 trucks and 850 bikes and other small carriers nationwide, currently connects 50 domestic cities, Reliance said in a statement.
The company plans to connect 100 cities in 12-18 months, Gopinath, who served in India's armed forces, said at a press conference to announce the deal.
Reliance Chairman Mukesh Ambani, the world's fourth-richest man with a net worth of $29 billion according to Forbes, was not present.
Gopinath earlier told Reuters he planned to develop Deccan's network in two years and add more aircraft on the back of the growing logistics sector in the country, and was in talks with several people for raising funds.
Reliance will get two places on Deccan 360's board, Gopinath told reporters while sitting in front of a hoarding that was split equally by the two companies' logos.
Gopinath declined to give specific details about Reliance's stake in Deccan and the sale price, citing a confidentiality agreement between the companies.
Reliance has been working hard to expand its presence outside India and break into new markets as well as broaden its various businesses including refining, oil and gas exploration and petrochemicals.
Last week, Reliance said it would pay $1.7 billion to form a joint venture with Atlas Energy ATLS.O for a 40 percent stake at one of the most promising natural gas deposit regions in the United States.
It had earlier made unsuccessful bids for majority stakes in bankrupt petrochemicals firm LyondellBasell ACCEIN.UL and Canadian oil sands firm Value Creation.
At 5:50 a.m. EDT, Reliance shares were down 0.8 percent at 1,081.50 rupees in a weak Mumbai market .BSESN.
(Additional reporting by Indulal P.M. and Nidhi Verma in NEW DELHI; Editing by Lincoln Feast)