Reliance Will Acquire Big Bazaar, Future Group For Rs 24,000 Crore; Govt Has No Objection
Huge setback for Amazon as CCI has given a green signal to the $3.4 billion deal between the country’s two largest retail giants, Future Group and Reliance Retail.
On Friday, the Indian watchdog Competition Commission (CCI) of India approved the deal, in turn creating a strong competition for American e-commerce group Amazon, earlier raised objections over the deal.
Moving ahead, the CCI informed about its approval for the proposed acquisition of retail, wholesale, logistics and warehousing businesses of Future Group, India’s second largest retail chain, by Reliance Retail, in a brief statement.
During August this year, Reliance Industries Ltd acquired the businesses of Kishore Biyani’s Future Group for Rs 24,713 crore in lieu of expansion of its fast expanding retail business.
After this approval, Mukesh Ambani led Reliance Retail will have access to nearly 1,800 stores.
The stores are spread across Future Group’s Big Bazaar, FBB, Easyday, Central, Foodhall formats, in more than 420 cities in India.
The move is part of the scheme where Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL).
Healthy Competition In Retail Industry
Under this acquisition, the retail and wholesale undertaking of Future Group will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL).
Here RRFLL is a wholly-owned subsidiary of Reliance Retail Ventures Ltd (RRVL).
Prior to this, the e-commerce giant, Amazon has argued that its contract with Future Coupons.
Which is one of Future Group’s holding companies, further prohibiting it from selling its assets to a competing firm like Reliance Retail.
As a setback, a Singapore arbitration court issued an order to temporarily halt the deal between the two Indian retail giants at the end of the last month.
After receiving the approval from the court , the two parties, Future Group and Reliance Retail said that they were working to complete their deal “without any delay.”
So far, Amazon did not respond to the request of comment.
This deal between India’s two largest retail chains was also expected to be an opportunity for the CCI to review the entire value chain including wholesale, logistics, warehousing and front-end retailing of the retail industry.
The green signal for the deal also indicates about the antitrust body’s conclusion.
According to them, the deal won’t have an adverse impact on competition in the relevant industry.