Indian stock exchanges have given the go ahead for Future Group’s $3.4 billion deal to sell its retail assets, bringing it closer to a partnership with billionaire Mukesh Ambani-led conglomerate Reliance Industries.
Future Group and American eCommerce giant Amazon are locked in legal tussles over the Indian group’s August deal with Reliance Industries. Amazon alleges the deal breached some of its pre-existing contracts with Future Group.
Following the encouraging news, Future Group’s shares soared 4.9 percent to touch a one-month high while Reliance shares jumped 2.7 percent. The approval takes Future Group, which operates supermarkets like Big Bazaar and high-end food stores such as Foodhall in India, a step closer towards sealing a deal that will create India’s groceries market leader.
In the notifications, Indian exchanges said they had no objection or adverse observation on the deal, saying they had reached the decision after communicating with India’s markets regulator, the Securities and Exchange Board of India (SEBI).
SEBI has advised that Future Group should share various details of the company’s ongoing litigation with Amazon when it approaches India’s National Company Law Tribunal, which also needs to sign off on the deal, the Bombay Stock Exchange (BSE) notification said.
A blow for Amazon
The notifications will be a setback for Amazon, which has in recent weeks repeatedly written letters to SEBI and stock exchanges to suspend the deal’s review. Amazon has also dragged Future Group before a Singapore arbitrator, which passed an interim order in October last year saying the Reliance deal should be halted.
Following the nod from the exchanges, Amazon in a statement said it would continue to pursue legal remedies to enforce its rights, noting that the approvals were subject to the outcome of the ongoing arbitration process and other lawsuits.
The outcome of the dispute involving Future Group, Reliance and Amazon is seen shaping India’s retail landscape, especially in deciding who will emerge as a leader of a groceries market expected to be worth around $740 billion a year by 2024.