NE BUSINESS BUREAU
MUMBAI, OCT 26
Reliance Retail Ventures Limited (RRVL) said on Sunday evening that its proposed deal to acquire Future Group’s assets, against which Amazon has filed a legal proceeding, is fully enforceable under the Indian law and it intends to complete the deal “without any delay.”
Mukesh Ambani’s firm issued the statement after Amazon won an emergency order from a Singapore arbitration court earlier on Sunday to temporarily halt the proposed sale between the two Indian retail giants. According to a person familiar with the matter, the injunction will prevent Future Group from selling its assets to Reliance Retail by about 90 days.
The American e-commerce group, which indirectly bought a 3.58% stake in Future Group’s Future Retail business last year, reached out to the Singapore International Arbitration Centre earlier this month to block what could emerge as the largest retail deal in India.
Amazon’s deal with Future Retail had given the American e-commerce giant the first right to refusal on purchase of more stakes in Future Retail, the Indian firm had said at the time. Earlier local media reports have claimed that the agreement between Amazon and Future Retail also included a non-compete clause. The two companies entered an additional deal early this year that granted Amazon “long-term” rights to sell Future Group’s products online.
Amazon, Walmart’s Flipkart, and Ambani’s Reliance Industries (which operates Reliance Retail), the most valuable firm in India, are locked in an intense battle to command the Indian retail market.
In a statement, an Amazon spokesperson said the company was “grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process.” The tribunal hearings are expected to start later this year.
Future Group, which has yet to comment on Amazon’s objection, entered the deal with Reliance Industries because the company could not continue to navigate through the losses the pandemic has caused to the business, its founder Kishore Biyani said at a virtual conference earlier this month.
At the moment, it is unclear whether today’s injunction is enforceable in India. Indeed, in a statement, a Reliance Industry spokesperson said that Reliance Retail’s transaction for the acquisition of assets and business of Future Retail was conducted under “proper legal advice” and the “rights and obligations are fully enforceable under Indian law.”
Reliance Retail “intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay,” said the spokesperson for the retail giant, controlled by Ambani, India’s richest man.
Founded in 2006, Reliance Retail serves more than 3.5 million customers each week (as of early this year) through its nearly 12,000 physical stores in more than 6,500 cities and towns in the country.
The retail chain, run by India’s richest man, Mukesh Ambani, has raised about $5.14 billion by selling about an 8.5% stake in its business to Silver Lake, Singapore’s GIC, General Atlantic, and others in the past two months.
