The approval of the Competition Commission of India (CCI) will expedite Reliance Industries' proposed Rs 24,713 crore acquisition of retail, wholesale, logistics, and warehousing businesses of Future Group as the pending SEBI and National Company Law Tribunal (NCLT) approvals are customary.
Both parties to the deal have started the procedures to get approvals from lenders, suppliers, and shareholders as it will culminate in clearance from the NCLT. The market regulator's approval will be largely required for the merger of Future's listed companies.
Reliance earlier stated that Reliance Retail Ventures (RRVL), the holding company of its retail businesses, intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay.
In this context, the Delhi High Court's ruling in the case will be crucial. The court is continuing to hear arguments by Future Retail Limited (FRL) and Amazon on the former's plea seeking to restrain the US e-commerce company from approaching regulatory bodies against the retailer's deal with Reliance's retail arm.
Singapore International Arbitration Centre (SIAC), on October 25, had passed an interim order in favour of Amazon barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party. Subsequently, Amazon wrote to market regulator SEBI, stock exchanges, and CCI, urging them to take into consideration the Singapore arbitrator's interim decision as it is a binding order.
CCI approved the acquisition after checking all legalities, said sources close to the deal. "The outcome of the arbitration doesn't hold any ground in India after the CCI approval," a corporate executive said.
Reliance will be paying Rs 24,713 crore for key formats of Future group such as Big Bazaar, FBB, Foodhall, Easyday, Nilgiris, Central, and Brand Factory, besides the Kishore Biyani-led conglomerate's logistics and warehousing business. It will take over certain borrowing and liabilities, the companies said.
As the first step of the deal, Future group will consolidate the retailing businesses scattered across six Future Group companies, FEL, Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chain, and Future Market Networks. FEL will carry out a slump sale after the consolidation.
Last year, Amazon bought a 49 per cent stake in one of Future Group's unlisted firms, Future Coupons Ltd, with the right to buy into flagship business FRL. Amazon has claimed that its contract with FRL has barred transactions with outside companies, including Reliance.
Legal experts point out that Amazon is trying to control Rs 30,000 crore worth of assets through its investment exposure of Rs 1,431 crore in Future Coupons Ltd. Banks and financial institutions have over Rs 18,000 crore exposure to Future Group companies which owe another Rs 7,500 crore to suppliers and vendors.
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