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HomeNews ReportsAmazon-Reliance tussle: Reliance Retail to complete its deal with Future Group without any delay

Amazon-Reliance tussle: Reliance Retail to complete its deal with Future Group without any delay

The RRVL, through its statement, added that it 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.

With the American e-commerce giant Amazon getting a favourable ruling in Singapore with regard to the Future-RIL deal on Sunday, Reliance Retail Ventures Ltd (RRVL), the retail arm of Indian behemoth Reliance Industries Ltd. released a statement saying it intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay.

“RRVL is informed of an interim order passed by the Emergency Arbitrator in the arbitration proceedings invoked by Amazon under a shareholders’ agreement with the promoters of Future group,” the statement said.

Reliance Retails Ventures Ltd issues statement on Amazon securing an interim order in Singapore

The RRVL, through its statement, added that it 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.

Reliance’s statement came after Amazon won an interim order, putting on hold the acquisition of Future Group’s retail business by Reliance Retail Ventures Ltd. A one-man arbitration panel in Singapore asked the Kishore Biyani’s Future Group to not proceed with the Rs 24,713 crore deal with Mukesh Ambani’s Reliance Retail for now.

Amazon, on the other hand, welcomed the Singapore ruling, hoping the arbitration process would yield a quick result. “We welcome the award of the Emergency Arbitrator. We are grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process,” said the Amazon spokesperson.

Amazon approaches the Singapore arbitration court over Reliance-Future deal

Earlier in August 2020, the Future Group announced the sale of its retail, wholesale and logistic etc. to Reliance Retail Ventures Ltd, the retail arm of Reliance Industries. This announcement prompted Amazon to go arbitration, citing that the Future Group has violated its non-compete clause in its contract by entering into a deal with rival Reliance.

Amazon had earlier agreed to purchase 49 per cent of one of the Future’s Future Coupons Ltd last year with the right to buy into flagship Future Retail Ltd after a period of three years to 10 years. Future Coupons owns a 7.3 per cent stake in Future Retail. Amazon believes that Future Group reneged on its contract by signing a pact to sell its retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani’s Reliance, following which it decided to drag the organisation to arbitration.

Amazon and Reliance lock horns to take control of India’s budding retail market

The deal, if executed, will catapult Reliance to the top in the retail segment by doubling its footprints. This has greatly alarmed the e-commerce companies such as Flipkart and Amazon, who have invested years and pumped billions of dollars in India to cultivate its retail market. With this legal dispute, Amazon aims to stake out the coveted retail market in India, which is pegged at USD 1 trillion and where online shopping is steadily on the rise. Amazon is also the authorised online sales channel for Future’s retail stores that sells a wide range of products, from groceries to electronic goods, clothes and others.

With Amazon approaching the Singapore arbitration court, analysts believe that it is an attempt by the e-commerce giant to stop Reliance from taking hold of the retail and online markets, which the acquisition of Future Group’s retail business would provide it. Amazon wants to keep Reliance at bay as it is known for toppling the existing players in the market with its ruthlessly disruptive market practices.

Reliance is currently operating India’s fastest-growing, and its most profitable retail business spanning supermarkets, consumer retail, wholesale fast-fashion outlets, and online grocery store JioMart. With the acquisition of Future Group’s retail business, it seeks to further bolster its presence in the country’s retail business landscape. The retail arm of the Reliance Industries, Reliance Retail Ventures Ltd., has also been on a fundraising spree by divesting its stakes in the organisation. Since Septemeber, it has raised Rs 37,710 crore by selling its stakes.

Given the context and now that the battle lines had been drawn between the American e-commerce giant Amazon and India’s fastest retail growing company Reliance, it will be interesting to see who emerges as a winner of this contest and gets to dominate the Indian retail market.

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OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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