New Delhi: In a move that will reshape the country’s retail market, Mukesh Ambani’s Reliance Group Saturday announced that it was acquiring retail, wholesale, logistics and warehousing business from Kishore Biyani’s Future Group for a lump sum amount of Rs 24,713 crore.
Mukesh Ambani’s Reliance Retail Ventures Limited was in talks with Kisore Biyani led Future Group, the pioneer in the country’s organised retail market for quite some time and a deal announcement was expected this month.
India's retail market, which was pegged at around $800 billion in 2017, is estimated to grow to $1.75 trillion by 2026.
"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,” said Isha Ambani, Director, Reliance Retail Ventures Limited.
“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," Isha Ambani added.
RRVL is a subsidiary of Mukesh Ambani led petrochemical-to-telecom giant Reliance Industries Group, who has ambitious plans for India’s organised retail sector.
“The deal is subject to adjustments as set out in the composite scheme of the arrangement,” RRVL said in a statement sent to ETV Bharat.
Reliance Retail Ventures said the acquisition was 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 deal, the retail and wholesale undertaking will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL and the logistics and warehousing business will be transferred to RRVL.
Reliance Retail and Fashion Lifestyle Limited (RRFLL) will invest Rs 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09 % of post-merger equity and Rs 400 crores will be invested 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 Future Enterprises Limited (FEL).
The acquisition of the retail, wholesale and supply chain business of the Future Group complements and makes a strong strategic fit into Reliance’s retail business, RRVL said.
The company said the acquisition will help Reliance retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times.
Future Group’s portfolio composition in apparel, general merchandise and own FMCG brands will allow for a wider offering to its customers, said the company.
RRVL said the deal was subject to regulatory approvals including approvals from the SEBI, the CCI, NCLT, shareholders, creditors and others.
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