Mukesh Ambani-led Reliance Industries Ltd (RIL) is likely to acquire Kishore Biyani-controlled Future Group's retail business for Rs 24,000-27,000 crore. The deal, which is in the final stage of negotiations, will bolster RIL's position in India's retail segment.
The approximate deal value comprises the liabilities of the Future Group that Reliance plans to absorb, the Mint reported, citing sources which further stated that the five listed firms, including Future Supply Chain, Future Market Networks, Future Consumer, Future Lifestyle Fashions and Future Retail Ltd, will be merged into Future Enterprises Ltd (FEL). The entities will be integrated before the sale of assets.
Following this, the FEL will carry out a slump sale of its retail assets to one of the retail subsidiaries of RIL which has exclusivity on the deal till July 31, by when the conglomerate needs to sign a binding agreement.
One of the sources further told the publication that negotiations are underway and the deal may take time to conclude.
RIL will also absorb Future Group's partnerships with foreign brands and retailers. For example, Future Retail Ltd had inked a master franchise deal with 7-Eleven Inc. to develop and operate 7-Eleven stores across India. No stores have opened so far, but the business is likely to go to RIL.
Future Group has accrued heavy debt over the years. As of September 30, 2019, debt at Future Group's listed entities rose to Rs 12,778 crore from Rs 10,951 crore as on March 31, 2019, the report stated.
Negotiations on the deal began earlier this year as one of Biyani's holding entities defaulted on the loan payment.
According to reports, Biyani, once the poster boy of India's retail sector, had earlier held several discussions with other potential investors as well.
Various big players like US-based retail giant Amazon had evinced interest in Future Group, but a deal with RIL offered a thorough solution to Biyani's debt issues.