The Competition Commission of India (CCI) has approved Reliance Retail’s acquisition of Future Group’s retail wholesale, logistics and warehousing businesses. Reliance Industries announced in August 2020 that its retail arm would be acquiring Future Retail by way of a slump sale for Rs 24,713 crore. With this, the deal, which is currently facing legal hurdles from Amazon, get regulatory go-ahead. This deal would now give Reliance Retail access to 1,800 stores of Future Group’s flagship retail formats including Big Bazaar, Central, FBB, FoodHall, among others. Reliance Retail already has around 12,000 stores across the country.
This comes even as Future Retail (FRL) is embroiled in a legal battle with Amazon over the Reliance deal. Amazon, which picked up a 49% stake in FRL’s promoter entity Future Coupons last year, approached an emergency arbitrator in Singapore seeking a stay on the Future Retail-Reliance Retail deal. It alleged that the deal violated its terms of agreement with Future Group, that the deal didn’t permit FRL from selling shares to a list of 15 companies (including Reliance), and that it wasn’t informed about the Reliance Deal. Future Retail has maintained that Amazon’s deal was with Future Coupons and that it is not party to the agreement.
The arbitrator ruled in Amazon’s favour, following which it wrote to markets regulator SEBI and the stock markets not to approve the deal. FRL, on its part, told the arbitrator that if the deal falls through, it would put the company’s thousands of employees and their livelihoods at risk.
Following this, Future Retail filed a suit against Amazon in the Delhi High Court for ‘interfering’ in its transaction with Reliance Retail and sought necessary relief from Amazon alleging it ‘misused’ the interim order passed by the Singapore International Arbitration Centre (SIAC).
At the hearings that have been ongoing for over a week, FRL’s counsel has argued that Amazon was not its shareholder and has no say in its affair. It has also maintained that the interim order passed by SIAC has no efficacy in law in the country. It has argued that Amazon has no control over FRL.
Meanwhile, Amazon, which is being represented by senior advocate Gopal Subramanium opposed the plea and said that being a group company of the Future Group, FRL would be governed by the arbitration agreement between Future Coupons and Amazon.
On Thursday, Senior counsel Harish Salve who is appearing for FRL told the Delhi HC that Amazon was trying to destroy competition by objecting to the deal and was ‘behaving like East India Company’.
“Reliance may not be as big as Amazon, but it is a muscular company in India. What prevents Reliance from entering online market. It will then be Amazon vs Reliance," Salve said in the court on Thursday.