Indian Stock Exchange has approved a massive deal worth $3.4B between Reliance Retail and Future Group. This deal between two retail giants is a major setback for Amazon. The American tech giant has been trying to tighten its grip over the Indian market, it has also invested over $6.5 billion in this market, and it was eying on this deal. Amazon was trying to have this deal fall in its basket, but that didn’t go as per their wish.
The Bombay Stock Exchange and SEBI, Securities and Exchange Board of India have issued a notification clarifying their approval and no-objection over this prestigious deal. Amazon was trying to block this deal from happening, and it even went further by writing a letter to SEBI, demanding SEBI stop it from happening. However, the efforts of Amazon met with failure, and this deal was found objectionable with neither SEBI nor antitrust watchdogs.
However, the approval from NCLT – National Company Law Tribunal, is pending. SEBI has ordered Future Group to share litigation details between it and Amazon to NCLT. In 2019, Amazon had invested over $100 million in Future Group’s unlisted firm. That investment allowed Amazon to buy 49% stake in it, and as per the deal, the Future Group was prohibited from selling off assets to rivals. Pandemic hit the retail Group so hard that it was in dire need of cash, revealed by Kishore Biyani, CEO and Founder of Future Group.
Legal Pursuits by Amazon Against The Deal
The company was in talks with Reliance Industries, which is known to run Reliance Retails, India’s largest retail chain. They were looking forward to selling various arms like warehousing, logistics, wholesale, and retail to Reliance. Retail giants settled the price tag for the deal around $3.4 billion.
Amazon wasn’t in favour of this deal, and it protested against the deal by seeking halt from an arbitrator in Singapore. Arbitrators heard the plea of Amazon, and it demanded Future Group to put the deal on hold. The retail giants reached the Delhi High Court in 2020. The Future Group pleaded in the court demanding an ad-interim injunction that restrained Amazon from putting obstacles in their deal.
However, a spokesperson from Amazon has revealed that the tech giant will seek legal remedies to stop this deal. The question is whether Amazon will get any desired results in their legal pursuit. The experts say that the retail market will increase to $1.3 trillion near 2025. It’s around $700 billion as of now. The total percentage of online shopping is around %3 in India.
If you enjoyed this article, follow us for more updates. Drop the comments to let us know what you think of it.
