New Delhi: In another highly successful deal, Mukesh Ambani’s Reliance Industries Ltd announced on Saturday the acquisition of Future Group businesses from Kishore Biyani to ₹24,713 crore to add to its rapidly expanding retail business and bolster e-commerce to face competition from Jeff Bezos’ Amazon.
“Reliance Retail Ventures Ltd (RRVL), a subsidiary of Reliance Industries Ltd, will acquire the retail and wholesale business and the logistics and warehousing business of Future Group as going concern on a falling sales basis for a global consideration of INR 24,713 crore “the company said in a statement.
Reliance Retail will now have access to nearly 1,800 stores in Future Group’s Big Bazaar, FBB, Easyday, Central, Foodhall formats, which are distributed in more than 420 cities in India.
“I am pleased to offer a home to Future Group’s renowned brands and formats,” said Isha Ambani, Director, Reliance Retail.
“With this transaction, we are pleased to provide a home for Future Group’s renowned brands and formats, as well as to preserve its business ecosystem, which has played an important role in the evolution of modern retail in India. We look forward to continuing the growth The 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 continuing to deliver value to our consumers across the country, “said Isha Ambani.
The above acquisition is made as part of the Scheme in which Future Group is merging certain companies conducting the aforementioned business into Future Enterprises Limited (FEL).
As part of the same scheme:
(i) the Retail and Wholesale Commitment is transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly owned subsidiary of RRVL
(ii) the Logistics and Storage Commitment is transferred to RRVL; and
(iii) RRFLL also proposes to invest: (a) ₹Rs 1,200 crore in preferential issue of FEL shares to acquire 6.09% of post-merger share capital; and
(yes) ₹Rs 400 crore in a preferential issue of share warrants which, upon conversion and payment of the balance of 75% of the issue price, will result in RRFLL acquiring plus 7.05% of FEL.
As part of the acquisition, Future Group will merge certain companies into Future Enterprises Limited (FEL).
Following this transaction, FEL will, however, retain the consumer goods manufacturing and distribution and integrated fashion sourcing and manufacturing business and its insurance joint ventures with Generali and the joint ventures with NTC Mills.
The terms of the deal involve a merger of Future Group’s five listed units in grocery, clothing, 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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