NE BUSINESS BUREAU
MUMBAI, AUG 29
To add to its fast-expanding retail business and bolster e-commerce to take on the competition from Amazon.com, Reliance Industries Ltd (RIL) on Saturday announced the acquisition of Future Group businesses for Rs 24,713 crore.
“Reliance Retail Ventures Limited (RRVL), subsidiary of Reliance Industries Limited, will acquire the Retail & Wholesale Business and the Logistics & Warehousing Business from the Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of Rs 24,713 crore,” the company said in a statement.
Commenting on this, Isha Ambani, Director, Reliance Retail Ventures Limited, said: “With this transaction, we are pleased to provide a home to the renowned formats and brands of Future Group as well as preserve its business ecosystem, which has played an important role in the evolution of modern retail in India. We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands. We are committed to continuing to provide value to our consumers across the country.”
The above 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).
As a part of the same Scheme: (i) the Retail & Wholesale Undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL; (ii) the Logistics & Warehousing Undertaking is being transferred to RRVL; and (iii) RRFLL also proposes to invest: Rs 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09 % of post-merger equity; and (b) Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75% of the issue price, will result in RRFLL acquiring further 7.05% of FEL, the release added.
The acquisition of the retail, wholesale, and supply chain business of the Future Group complements and makes a strong strategic fit into Reliance’s retail business. This will help Reliance retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times.
Future Group’s portfolio composition in apparel, general merchandise, and own FMCG brands will allow for a wider offering to its customers.
This acquisition is subject to SEBI, CCI, NCLT, shareholders, creditors, and other requisite approvals.
