CCI approves Future Group-Reliance Retail deal, setback for Amazon2 min read . Updated: 20 Nov 2020, 05:41 PM IST
- 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
In a huge setback for e-commerce giant Amazon, Competition Commission of India (CCI) on Friday approved the much-anticipated Future Group-Reliance Retail deal. "Commission approves acquisition of retail, wholesale, logistics & warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited," CCI said in a tweet. Mukesh Ambani-led Reliance Industries Ltd in August acquired the businesses of Kishore Biyani's Future Group for ₹24,713 crore to add to its fast expanding retail business.
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. The acquisition is being done as part of the scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL).
The retail and wholesale undertaking of Future Group will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of Reliance Retail Ventures Ltd (RRVL).
The logistics and warehousing undertaking will be transferred to RRVL directly. “As a result of this reorganisation and transaction, Future Group will achieve a holistic solution to the challenges that have been caused by Covid and the macro economic 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", Kishore Biyani, Group CEO, Future Group said earlier.
E-commerce giant Amazon, an investor in one of Future's holding companies, earlier won an injunction from a Singapore arbitrator to halt Future's deal to sell retail assets to Reliance, arguing the Indian retailer group breached certain contract provisions it entered into last year in a separate deal with the US firm.
Amazon has 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.
Future Retail Ltd earlier 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. It has also taken Amazon to court in an effort to prevent it from sending letters to regulators.
The Delhi High court on Friday reserved its order on Future Retail Limited’s plea seeking to restrain Amazon from approaching regulatory bodies against the deal with Reliance’s retail arm. The court concluded hearing arguments by both the parties and reserved its judgment. The court has directed the parties to file written submissions by 23 November.