India’s antitrust body has cleared the $3.4 billion deal by the country’s conglomerate Reliance Industries to purchase the retail assets of Future Group, hindering the attempts of US-based eCommerce giant Amazon to block the deal.
The Competition Commission of India (CCI) declared its decision through a tweet and more details are expected shortly. Deals above a certain threshold require approval from the CCI, which maintains a tab on unfair market practices across sectors in the country.
Amazon had approached the CCI and the country’s market regulator SEBI (Securities and Exchange Board of India) alleging the deal would violate some pre-existing agreements it had with Future Group.
Amazon had secured a Singapore arbitrator’s injunction last month to halt the contract pending arbitration.
Although the deal is yet to be authorized by SEBI, the stock exchanges and market regulator, the three companies are now engaged in a legal battle over the deal in the capital of the country. It was in August that the $3.4 billion deal that would boost the fast-growing retail business of Reliance Industries was announced.
An Indian antitrust lawyer said the CCI only looks into competition issues around a deal and is not concerned with other disputes between parties. “It’s (CCI) not a regulator which approves the transaction as such,” the lawyer said.
Amazon argues that its 2019 agreement with a subsidiary of the Future Group included clauses that it could not sell its retail assets to certain parties including Reliance. However, Future Retail claimed that the agreement in question was not with the company but with the main shareholder of the company and the arbitration order was not valid in India. In an attempt to keep it from sending letters to regulators, it had even taken Amazon to court.
Future Group said that it entered into the deal with Reliance because the retail business was severely hit during the pandemic and it is important to protect all its stakeholders.
The dispute has put Amazon at odds not only with Future Retail, one of the top retailers in the country, but also Ambani’s Reliance Group, which is rapidly growing its eCommerce business and threatening the US giant’s dominance.