India’s one of the most iconic retail brands: Big Bazaar, has been bought by Reliance for Rs 24,713 crore. Reliance has officially confirmed this now.
This is India’s one of the biggest retail acquisitions, which makes Reliance Retail, already India’s #1 retailer unstoppable.
Here are 5 facts you should know..
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Future Group’s Big Bazaar Is Now Under Reliance Retail
In an official announcement, Reliance Retail has announced that they have acquired Future Group’s retail, wholesale, logistic business for Rs 24,713 crore.
In a statement, Reliance said, “Reliance Retail Ventures Ltd (RRVL), subsidiary of Reliance Industries Ltd will acquire the retail and wholesale business and the logistics and warehousing business from the Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of INR 24,713 crore,”
Which Brands Will Now Reliance Control & Own?
After this acquisition, Reliance Retail will control and own Future Group’s Big Bazaar, FBB, Easyday, Central, Foodhall formats, across India.
There are around 1800 stores of these brands, across 420 Indian cities.
Isha Ambani, Director, Reliance Retail said, “Pleased to provide a home to the renowned formats and brands of Future Group,”
How Will This Mega Acquisition Work?
First of all, Future Group has merged all these retail businesses being sold to a new entity called Future Enterprises Limited (FEL).
Now, the retail and wholesale business of Future Group will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), which is a wholly-owned subsidiary of Reliance Retail Ventures Ltd (RRVL), which is a subsidiary of Reliance Industries.
On the other hand, logistics and warehousing will be directly transferred to Reliance Retail Ventures Ltd (RRVL).
Kishore Biyani, Group CEO, Future Group said, “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.”
What Will Future Group Control & Hold Now?
Via Future Enterprises Limited (FEL), Future Group will now control and hold:
- Manufacturing of FMCG goods
- Distribution of FMCG goods
- Integrated fashion sourcing
- Entire manufacturing business
- Insurance joint ventures with Generali and JVs with NTC Mills
What Next?
After this mega acquisition, Future Group will focus solely on manufacturing, distribution of FMCG goods, along with integrated fashion sourcing and merchandising, whereas Reliance Retail will step up their retail business, and most probably integrate their online ecommerce channels with the same to emerge as the strongest online and offline retail player in India.
Besides, there exists a debt exposure of Rs 11,000 crore on account of Future Group, which needs to be managed.
The lenders who seek money from Future Group have demanded access to Future Group’s real estate portfolio, which will be hived off into a separate company.
We will keep you updated, as more details come in.
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