Reliance Retail says it will acquire Future Group without delay

Daniel Fowler
October 26, 2020

Amazon past year bought a 49 per cent stake in Future Coupons Ltd, which owns a 7.3 per cent stake in Future Retail.

Reliance Retail on Sunday announced that it would complete the acquisition of Future Group without any delay.

Passing an interim award in favour of Amazon, VK Rajah instructed Future group to put the deal on hold and added that it can not proceed until it finally decides the matter, sources with knowledge of the development told moneycontrol.

The order by the Singapore-based arbitration court meant that Kishore Biyani's Future Group will not be able to sell its retail business to Reliance Industries as agreed for Rs. 24,713 crore.

Reliance Retail Ventures Limited (RRVL), while responding to an interim order passed by the Emergency Arbitrator said that it will acquire all of the assets and businesses of Future Group as per all the obligations of the Indian law. Reliance is already India's biggest brick-and-mortar retailer and has ambitious plans for the online segment that would see it take on Amazon in what is a rising market. In August, Mukesh Ambani's Reliance chose to buy retail, wholesale and some other businesses of the Future Group in a deal valued at $3.38 billion, including debt.

36 new COVID-19 cases in Brookings Co. Sunday, Oct. 25
A day after the US set a daily record for new confirmed coronavirus infections , it came very close to doing it again. These numbers include both cases confirmed by a viral test and cases that meet the CDC's definition of probable.

Future Retail Limited (FRL) said it is examining the order and also clarified that it is not a party to the agreement under which Amazon has invoked arbitration proceedings.

With the dispute, Amazon is drawing the battle lines with Reliance in the race for India's estimated United States dollars 1 trillion retail market, where online shopping is gaining ground.

Among other Future Group stocks, Future Consumer (Rs 7.54), Future Enterprises (Rs 9.53) and Future Supply Chain Solutions (Rs 91.20) were locked in 5 per cent lower circuit on the BSE. The former Attorney-General of Singapore, V.K. Rajah, was the arbitrator for the case.

Future Group was not immediately reachable for comment. While Future Retail side was represented by advocate Harish Salve, sources said. According to a person familiar with the matter, the injunction will prevent Future Group from selling its assets to Reliance Retail by about 90 days. It operates about 12,000 stores in almost 7,000 towns, with 640 million footfalls across core categories of grocery, consumer electronics and apparel. The deal would have been a bailout for Future, which faces another potential cash crunch as competition in the Indian retail space intensifies and the economy slows amid the coronavirus pandemic. Revenues of Reliance Retail in FY20 stood at Rs 1.63 lakh crore. The investments come as the country's retail sector prepares for the upcoming festival season and would help Reliance to launch an assault on rivals such as Walmart-owned Flipkart and Amazon.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER