Billionaire Mukesh Ambani-led Reliance Industries (RIL) has moved close to inking a deal with the retail enterprise of Kishore Biyani’s Future Group. This move will give Reliance much-needed firepower for becoming number one in the physical retail business.
According to the deal, Biyani will withdraw control over all businesses under the Future Retail which has about 1,500 retail stores. It will implicate merge of three entities — Future Retail, Future Lifestyle Fashions and Future Supply Chain Solutions.
It comprises big retail names like Big Bazaar, FBB, Ezone, Nilgiris & Easyday. Meanwhile, Future Lifestyle has 300 stores under brands such as Central and Brand Factory. The combined business will then be taken over by the Mukesh Ambani’s entity.
The meetings between Reliance and Future Group are currently at an advanced phase, and RIL wishes to lock the deal before the upcoming AGM (Annual General Meeting) on July 15.
Discussion of the deal started earlier this year as one of Biyani’s companies defaulted on loan repayment.
Once the poster boy Biyani was recognized as the Retail King who was in discussions with various players in the market involving Premji Invest and Samara Capital, along with Jeff Bezos Amazon who expressed interest in Future Group.
“It is likely to be a complex transaction as, first, Future Group will announce a scheme of arrangement to merge into one company. RIL is most likely to completely buy out this combined entity in exchange for its shares,” as per one of the sources.
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Existing investors in numerous Future Group businesses—Amazon, Blackstone and PremjiInvest—may get stakes in RIL. Last year, Amazon also bought an indirect stake in Future Retail by financing in one of the promoter entities of Biyani.
As per the people in market trading reported that “The implication of this deal with Reliance would have a significant impact on the retail sector both online and offline. This would add a new dimension to the much-touted Ambani-Bezos battle.”
