After months of negotiation, Kishore Biyani-led Future Group has announced that global e-commerce giant Amazon will be picking up a 49% stake in Future Coupons. Future Coupons is the promoter entity of Future Retail and hold 7.3% stake in it. Through this deal, Amazon will indirectly hold a 3.6% stake in Future Retail.
Future Retail runs the popular Big Bazaar chain, FBB, Food Hall, among others.
“Pursuant to these agreements, Amazon has agreed to make an equity investment in Future Coupons Limited for acquiring a 49% stake comprising both, voting and non-voting shares,” Future Retail said in a regulatory disclosure.
As part of the agreement, Amazon also gets a call option, allowing it to acquire part of the promoters' shareholding in Future Retail and is exercisable between the third to tenth year, in certain circumstances, subject to applicable law.
What this means is that three years from now, subject to the prevalent FDI norms at the time, promoters of Future Retail can sell a partial or controlling stake to Amazon.
The transaction is subject to obtaining applicable regulatory approvals and customary closing conditions.
“This investment reflects our commitment to innovate for Indian customers and offer best-in-class shopping experience. This investment provides an opportunity for us to learn global trends in digital payments solutions and launch new products,” a Future Group spokesperson said.
Future Coupons offers value-added payment products and solutions like gift cards, loyalty cards, and reward cards.
This deal with Future Retail comes at a time when Amazon is aggressively pushing to expand its presence in India. Its biggest rival in the country – Flipkart – was taken over by its global competitor Walmart.