2 min read
.Updated: 29 Aug 2020, 09:00 PM IST
Edited ByJ. Jagannath
Reliance Retail will now have access to close to 1,800 stores across Future Group’s Big Bazaar, FBB, Easyday, Central, Foodhall formats, which are spread in over 420 cities in India
New Delhi:In yet another blockbuster deal, Mukesh Ambani’s Reliance Industries Ltd on Saturday announced the acquisition of businesses of Kishore Biyani’sFuture Groupfor ₹24,713 crore to add to its fast expanding retail business and bolster e-commerce to take on the competition from Jeff Bezos’ Amazon.
“Reliance Retail Ventures Ltd (RRVL), subsidiary of Reliance Industries Ltd will acquire the 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 INR 24,713 crore,” the company said in a statement.
Reliance Retail will now have access to close to 1,800 stores across Future Group’s Big Bazaar, FBB, Easyday, Central, Foodhall formats, which are spread in over 420 cities in India.
“Pleased to provide a home to the renowned formats and brands of Future Group,” said Isha Ambani, Director, Reliance Retail.
“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,” said Isha Ambani.
The above acquisition is being done as part of the scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL).
As a part of the same Scheme:
(i)the Retail & Wholesale Undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL
(ii)the Logistics & Warehousing Undertaking is being transferred to RRVL; and
(iii) RRFLL also proposes to invest:(a)₹1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09 % of post-merger equity; and
(b)₹400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75% of the issue price, will result in RRFLL acquiring further 7.05% of FEL.
After this transaction, FEL, however, will retain the manufacturing and distribution of FMCG goods and integrated fashion sourcing and manufacturing business and its insurance JVs with Generali and JVs with NTC Mills.
The deal terms entail a merger of five listed units of Future Group across grocery, apparel, supply chain and the consumer business into Future Enterprises Ltd (FEL), which currently manages the group’s retail back-end infrastructure.
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