Billionaire Mukesh Ambani's Reliance Industries Ltd on Saturday announced the acquisition of Future Group businesses for Rs 24,713 crore to add to its fast-expanding retail business and bolster e-commerce to take on the competition from Amazon.com.
"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 Rs24,713 crore," the company said in a statement.
In a media release, Reliance said the acquisition was a 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) Rs 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09 per cent of post-merger equity; and (b) Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75 per cent of the issue price, will result in RRFLL acquiring further 7.05 per cent of FEL. "
Commenting on the acquisition, Isha Ambani, Director, Reliance Retail Ventures Limited, said, "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."
Reliance Retail has over 11,000 stores across India. With the acquisition, it will take over Future Retails 1,500+ stores across 400 cities in India.
With inputs from PTI