Indian billionaire Sunil Mittal's Bharti Retail will merge with rival Future Retail to create one of India's biggest chains with more than 570 stores across the country, the companies said Monday.
Two companies will be formed under the structure of the deal, which was approved by the boards of Bharti and Future, in a bid to cash in on India's growing retail sector, they said in a statement.
"Retail is emerging as the next big growth engine for India and we will be well positioned to be a major player in this growth story," said Rajan Bharti Mittal, vice chairman of Bharti Enterprises.
The merger is also expected to significantly reduce interest costs on debts of the existing firms, the statement added.
India has a fast growing retail sector thanks to an expanding middle class, with another major player Reliance Retail -- controlled by one of India's wealthiest men Mukesh Ambani -- selling everything from vegetables to electronics.
Bharti Retail is a unit of Mittal's Bharti Enterprises, which runs 212 "Easy Day" convenience stores across India.
Future Retail has a combined 17 million square feet (1.6 million square metres) of retail space across supermarkets, apparel outlets and electronics stores.
Under the structure of the deal, a new entity called Future Retail will hold the combined store operations, comprising some 570 stores across more than 200 cities.
Another new entity called Future Enterprises will own the infrastructure, investments and assets of both companies, the statement said.