Reliance Retail, India's largest retail chain announced on Sunday evening that the proposed deal to acquire Future Group's assets for a whopping $ 3.4 billion – which Amazon has filed a lawsuit against – is fully enforceable under Indian law and intends to close the deal “without any deal "delaying completion."
Mukesh Ambanis Company issued The statement after Amazon received an emergency warrant from a court of arbitration in Singapore on Sunday to temporarily halt the proposed sale between the two Indian retail giants. According to one person familiar with the matter, the injunction will prevent Future Group from selling its assets to Reliance Retail for about 90 days.
The American e-commerce group, which last year indirectly acquired a 3.58% stake in Future Group's future retail business, reached out to the Singapore International Arbitration Center earlier this month to block what was happening could turn out as the largest retail store in India.
Amazon The contract with Future Retail gave the American e-commerce giant the first right to refuse to buy further shares in Future Retail, the Indian company said at the time. Earlier local media reports have alleged that the agreement between Amazon and Future Retail also included a non-compete agreement. The two companies signed an additional contract earlier this year that gave Amazon “long-term” rights to sell Future Group's products online.
Amazon, Walmart Flipkart, and Ambanis Reliance Industries (which operates Reliance Retail), the most valuable company in India, are in an intense battle to lead the Indian retail market.
In a statement, a spokesman for Amazon said the company was "grateful for the contract, which includes all of the requested facilities. We remain committed to the rapid conclusion of the arbitration proceedings. “The trial is expected to begin later this year.
Future Group, The company, which has not yet commented on Amazon's objection, signed the deal with Reliance Industries because the company was unable to navigate further through the losses the pandemic has caused the company, its founder Kishore Biyani said at a virtual conference Earlier this month.
It is currently unclear whether today's order is enforceable in India. In a statement, a Reliance Industry spokesperson said that Reliance Retail's transaction to acquire assets and businesses from Future Retail was conducted under "reasonable legal advice" and that "rights and obligations are fully enforceable under Indian law."
Reliance Retail "intends to enforce its rights and promptly complete the transaction under the program and the agreement with Future Group," said the spokesman for the retail giant, which is controlled by Ambani, India's richest man (pictured above).
The Singapore court case surprised many in the industry as Amazon prepares to acquire a billion-dollar stake in Reliance Retail, according to previous reports from ET Now and Bloomberg.
Since e-commerce only accounts for between 3 and 7% of all retail sales in India and Reliance Retail is launching its own e-commerce business to combat Amazon and Flipkart, the future contract with Reliance Retail announced by Amazon is already recognized by many Industry analysts see it as critical to the future of the American e-commerce company in India. Amazon, which began its journey to India seven years ago, has invested more than $ 6.5 billion in its local business in the country.
Reliance Retail was founded in 2006 and serves more than 3.5 million customers weekly (as of early this year) through its nearly 12,000 physical stores in more than 6,500 cities across the country.
The retail chain, run by India's richest man Mukesh Ambani, has raised around $ 5.14 billion in the past two months by taking an 8.5% stake in Silver Lake, Singapore's GIC, General Atlantic and sold to others.
Ambani's other company, Jio Platforms, raised over $ 20 billion this year from more than a dozen marquee investors, including Google and Facebook.
Meanwhile, Walmarts Flipkart acquired a 7.8% stake in Aditya Birla Fashion, a fashion retail conglomerate that operates over 3,000 stores in India, for $ 203.8 million on Thursday. Flipkart dominates online clothing sales in India, thanks in part to Myntra, a fashion e-tailer it bought in 2014. Over the years, the Walmart company has made several other investments in strengthening its fashion category. In July, the company invested $ 35 million in Arvind Fashions, part of a decade-old Indian retail giant.