Reliance Industries announced the acquisition of a stake in Future Group in order to boost its rapidly growing retail business.
Reliance as per the deal will be acquiring the Future Retail that is the owner of Big Bazaar and Future Lifestyle Fashions Ltd. which operates Brand Factory. The Future Group’s financial and insurance business will not be a part of the deal.
“Reliance Retail Ventures Ltd (RRVL), subsidiary of Reliance retail and wholesale business and the logistics and warehousing business from the Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of Rs 24,713 crore”as per the statements.
About the Future Group…
The Future Group is an Indian conglomerate company founded by Kishore Biyani with subsidiaries such as Future Retail, Big Bazaar, etc.
A year ago, Amazon had acquired an indirect stake in the Future Retail of 1.3% by obtaining 49% of Future Coupons Ltd.
The Future Group stated that it, “Sell by way of a slump sale the retail and wholesale business that includes key formats such as Big Bazaar, FBB, Foodhall, Easyday, Nilgiris, Central and Brand Factory to Reliance Retail and Fashion Lifestyle Ltd (RRFLL), a wholly-owned subsidiary of Reliance Retail Ventures Ltd.”
Future Retail handles 1550 stores while the Future Lifestyle Fashion controls 354 stores.
“As a result of this reorganization and transaction, Future Group will achieve a holistic solution to the challenges that have been caused by COVID and the macroeconomic environment. This transaction takes into account the interest of all its stakeholders including lenders, shareholders, creditors, suppliers, and employees giving continuity to all its businesses.”Kishore Biyani, CEO Future Group.
What is Reliance’s take on it?
“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 have 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 continue providing value to our consumers across the country”stated Isha Ambani
This step by Reliance is also to compete with Walmart and Amazon while Mukesh Ambani, currently the richest man in Asia also touched the 5th position worldwide looks forward to race Jeff Bezos – the richest on the planet, who recently created history by becoming the first person to cross $200 billion in terms of net worth.
RRFLL (Reliance Retail and Fashion Lifestyle Ltd.) even advanced to invest Rs. 1,200 crore in the preferential issue of equity shares to acquire 6.09 % of post-merger equity holding.