In a meeting held on Sunday, the board of directors of Pantaloon Retail India Ltd (PRIL) decided the "merger of Future Value Retail Ltd, a wholly owned subsidiary, with the company".
The company, however, did not share details of the proposed merger.
Future Value Retail operates 148 Big Bazaar and 169 Food Bazaar stores, among other formats, in over 70 cities across the country, according to its website. It also runs another retail brand KB's Fairprice.
In a filing to the BSE, PRIL also said it will "demerge business undertaking, comprising all business, activities and operations pertaining to the Pantaloons Format Business of the company and transfer to Peter England Fashions and Retail Ltd (PEFRL) by way of a scheme of arrangement".
On Sunday, Aditya Birla group firm PEFRL's board had approved the demerger of Pantaloon format business and fixed the share swap ratio at 1:5—meaning for every five shares of Pantaloon, the shareholders will get one Peter England share.
Under the transaction, PRIL will also transfer all undertakings, business, activities and operations pertaining to the 'Pantaloons Format' business to Peter England. Besides, a debt of Rs 1,600 crore will be transferred to PEFRL.
As part of the scheme, Aditya Birla Nuvo Ltd (ABNL) and/or its affiliates intend to make a voluntary open offer to other shareholders of PEFRL.
These developments mark a step closer towards Aditya Birla Group's proposed acquisition of majority stake in Kishore Biyani-led group's flagship Pantaloon format apparel retail business unit.
Post-demerger, the holding of ABNL in PRIL through its subsidiary PEFRL will be 50.09 per cent.
In April, Future Group gave away majority control of Pantaloon to ABNL for a total consideration of Rs 1,600 crore.
The group, laden with an estimated consolidated debt of Rs 6,000 crore, was understood to have finalized plans to exit from stationery joint venture with US-based Staples by selling its entire stake to the partner for up to Rs 170 crore.