Bengaluru, NFAPost: Future Group promoter received a legal notice from Amazon Inc over the retailer’s deal with Reliance Industries. In August, Mukesh Ambani-led Reliance Industries said it would acquire the retail and wholesale business as well as the logistics and warehousing business of Future in a deal valued at $3.38 billion, including debt.
Amazon, in its legal notice, cited a contract arrangement that included “a restricted list” of companies Future was not supposed to enter deals with, according to the report
Last year Amazon had acquired a 49% stake in Future Coupons, which owns a 7.3% interest in the retail group that operates more than 1,500 stores in India, including grocery chain Big Bazaar.
On August 29, Reliance Retail Ventures Limited (RRVL) had announced a deal to acquire the entire retail, wholesale, logistics and warehousing businesses of the Future Group on a going concern basis for Rs 24,713 crore. Lenders, who had a substantial exposure to the Future group, had supported the transaction. Post deal, Future Enterprises Ltd (FEL) – in which all Future group companies were merging; was left with consumer products business and stake in two insurance ventures.
According to ecommerce industry sources, when Amazon had invested in Future Coupons last year, it had received certain rights under the contractual agreements. Non-compete restrictive clause was one such.
An executive in the know pointed out that when Reliance and Future entered the deal, Amazon was not kept informed. For the last few months now, Amazon has been making attempts to reach out to the Future Group without any success, he said.
The Jeff Bezos-led e-commerce giant Amazon, already owns 49% in More – a brick and mortar supermarket chain. Samara Capital holds the rest of the equity in More. Both made an investment of $450 million in 2018 and followed up with an additional $37 million last month. Currently, only 7% of the $1.2-trillion retail market is online.