CCI approves the future group-Reliance Retail Deal in a major setback for Amazon
The Competition Commission of India (CCI) approved the much-anticipated Future Group-Reliance Retail.
CCI approves the future group-Reliance Retail Deal in a major setback for Amazon
- This deal adds strength to the Mukesh Ambani-led Reliance Industries Ltd’s expanding retail business.
- With this deal, Reliance Retail will now have access to close to 1,800 stores across 420 cities in India.
- The decision comes as a major setback for Amazon, as it believes that Future group breached certain provisions in the deal between Amazon and Future.
The Competition Commission of India (CCI), on Friday, has approved the much-anticipated Future Group-Reliance Retail deal involving the acquisition of retail, wholesale, logistics, and warehousing businesses of Future Group by Reliance Retail Ventures Ltd (RRVL) and Reliance Retail and Fashion Lifestyle Ltd. Rs 24,713 Crore.
Mukesh Ambani-led Reliance Industries Ltd. on August 29 acquired the businesses of Kishore Biyani’s Future Group to add to its fast-expanding retail business.
With this deal, Reliance Retail will now have access to close to 1,800 stores across Future Group’s Big Bazaar, FBB, Easyday, Central, Foodhall formats, which are spread in over 420 cities in India. As part of the deal, Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL).
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Earlier, Kishore Biyani, Group CEO, Future Group had 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.”
The decision comes as a major setback for e-commerce giant Amazon, as it is an investor in one of Future’s holding companies and had also won an injunction from a Singapore arbitrator (SIAC) on October 25 to halt Future’s deal to sell retail assets to Reliance.
According to the SIAC interim order, a three-member arbitration panel needs to be set up within 90 days, with one judge each being appointed by Future and Amazon, along with a third neutral judge.
Amazon’s argument is that the Indian retailer group breached certain contract provisions it entered into last year in a separate deal with the US firm.
Earlier, Amazon had also approached market regulator Securities and Exchange Board of India (Sebi), stock exchanges, and CCI, urging them to consider the arbitration order and not approve the deal.
However, Future Retail Ltd told the Delhi High Court that Amazon was not its shareholder and has no say in its affairs and the interim order passed by the Singapore International Arbitration Centre (SIAC) was of no value.
Source: STARTUPNEWS
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