The US-based online-retail giant Amazon on Sunday won an interim decision from an arbitration court in Singapore against Kishore Biyani’s Future Group for its deal with Mukesh Ambani’s retail arm Reliance Retail Ventures Limited (RRVL). The court, in its order, has asked the Future group to put the deal with Reliance on hold and made it clear that it cannot go through until the disposal of the matter, according to media reports.
After the ruling, Reliance came up with a statement which said ‘it intends to enforce its rights and complete the transaction as per its agreement with the Future Group without any delay".
Jeff Bezos’ Amazon holds 49% stake in a Future Group firm, Future Coupons, and in turn, this firm own 7.3% stake in Future Retail which is the retail firm Reliance is trying to buy off. Reliance Retail Ventures operates retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets and online grocery store JioMart. With the acquisition of Future Retail, which controls the supermarket chain, Big Bazar, throughout the country, Reliance Retail would look to compete with Amazon and Walmart’s Flipkart in the Indian online retail market.
Reliance looks to finalise Future Retail deal, Amazon intervenes: Key Points
- Passing an interim award in favour of Amazon, VK Rajah asked the Future group to put the deal on hold and said that the deal cannot go through until it finally decides the matter, sources with direct knowledge of the development said.
- Reliance Industries' retail arm, Reliance Retail Ventures Limited (RRVL), said it has been informed about the interim order passed by the emergency Arbitrator in the arbitration proceedings and intends to complete the transaction with Future group without any delay.
- "RRVL has entered into the transaction for the acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian Law. RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay, Reliance Retail said in a statement.
- The ruling marks provide some respite for Amazon as it seeks to halt a deal that could give Mr Ambani unparalleled dominance in the race for the country's consumer retail market.
- Reliance Industries - already the country's biggest brick-and-mortar retailer - has plans for the online segment that would see it take on Amazon in what is a rising market.
- A host of global investors, including the likes of TPG, GIC, Silver Lake Partners, KKR and Mubadala, have invested in Reliance Industries' retail arm this year.