Reliance Retail buys Future Group's businesses for ₹24,713 crore

DY365
DY365
Published: August 30,2020 09:34 AM
DY365

Story highlights

August 30, 2020: In yet another mega buster deal, Mukesh Ambani's Reliance Industries Ltd has announced the acquisition of businesses of Kishore Biyani's Future Group for ₹24,713 crore

August 30, 2020: In yet another mega buster deal, Mukesh Ambani's Reliance Industries Ltd has announced the acquisition of businesses of Kishore Biyani's Future Group for ₹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).



The latest deal was expected to be closed this month since many of Future Group’s lenders wanted the group to resolve the debt issues before the moratorium ends on 31 August.



The transaction with the Future Group will bolster Reliance Retail -- already the nation’s largest retailer by the number of stores -- in a sector that’s estimated to be worth $1.3 trillion by 2025 from $700 billion in 2019, according to a February study by Boston Consulting Group and Retailers’ Association India. The deal will also help the indebted Future Group pare its borrowings.



After disrupting India’s telecom sector, Ambani is now pushing ahead with his ambitions in the brick-and-mortar retail and e-commerce space. Asia’s wealthiest man is on a mission to transform his conglomerate into a consumer-services giant and reduce dependence on revenue from its traditional businesses of petrochemicals and oil refining.