Future Group - Reliance Retail Deal approved by CCI

Tech Samvad
·2-min read

The Competition Commission of India (CCI) has approved the Reliance acquisition of the Future Group that has been in the works for quite a while. The Mukesh Ambani-led Reliance retail group can now use Kishore Biyani-led Future Group's retail properties such as Big Bazaar, FBB, Easyday, Central, and Foodhall. The acquisition was completed for ‚¹24,713 crores to increase Reliance's fast-expanding retail business. Future Group now contributes a total of 1,800 stores in 420 cities to Reliance's retail division, Reliance Retail and Fashion Lifestyle Limited (RRFLL), a subsidiary of Reliance Retail Ventures Ltd. (RRVL).

Kishore Biyani, CEO of Future Group said "As a result of this reorganization and transaction, Future Group will achieve a holistic solution to the challenges that have been caused by Covid and the macroeconomic environment. This transaction takes into account the interest of all its stakeholders including lenders, shareholders, creditors, suppliers, and employees giving continuity to all its businesses."

While Reliance is going to be able to grow its fast-growing retail business, this deal is going to be a setback for Amazon.

https://twitter.com/CCI_India/status/1329755690412380162

In 2019, Amazon raised the argument that an agreement between it and Future Group prevented it from selling its retail assets to certain parties. Amazon, an investor in one of Future's holding companies, won an injunction against this deal from an arbitrator in Singapore. Further, Amazon approached the CCI and the Securities and Exchange Board of India (SEBI) to hold up the arbitration order and not approve the deal.

Future Group's response to this was that Future Retail -- in the agreement -- was not a part of the company, but was with the company's largest shareholder, which rendered the arbitration order invalid in India.

Also See: As deal with Reliance stalls, it’s Future Imperfect for Big Bazaar owner

Amazon seeks control of Future Group's assets worth Rs 30,000 crore through investment of Rs 1,431 crore

Amazon may be on the wrong side of India’s FDI rulebook for multi-brand retail on dispute with Future Retail

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