CCI approves Reliance Retail-Future Group deal; nod termed as setback to Amazon

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Reliance Retail will get access to close to 1,800 stores across Future Group's Big Bazaar, FBB, Easyday, Central, Foodhall formats, which are spread in over 420 cities across India

In what can be termed as a setback for e-commerce major Amazon, the Competition Commission of India (CCI) gave its nod to Reliance Retail-Future Group deal on Saturday.

The CCI approved the acquisition by Reliance Retail Ventures Limited (RRVL), Reliance Retail and Fashion Lifestyle Limited (RRVL WOS) of the retail and wholesale undertaking and the logistics and warehousing undertaking of the Future Group under Section 31(1) of the Competition Act, 2002, said the Ministry of Corporate Affairs in a statement.

"Commission approves acquisition of retail, wholesale, logistics & warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited," CCI said in a tweet.

Mukesh Ambani-led Reliance Industries in August this year had acquired the businesses of Kishore Biyani's Future Group for Rs 24,713 crore to add to its fast expanding retail business.

As a part of the same scheme, the retail and wholesale undertaking is being transferred to  Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL; the logistics and warehousing undertaking is being transferred to RRVL.

Now, Reliance Retail will get access to close to 1,800 stores across Future Group's Big Bazaar, FBB, Easyday, Central, Foodhall formats, which are spread in over 420 cities across India.

The Transferor Companies consists of several listed and unlisted companies, primarily engaged in retail, wholesale, logistics and warehousing businesses. These businesses operate on a pan-India basis, and include retail operations across segments such as food and grocery, apparel, footwear and accessories, other merchandise, etc.

RRVL is an unlisted company and is engaged in the business of retail supply chain management. Reliance Retail Limited, a subsidiary of RRVL, undertakes retail operations in India across segments such as food and grocery, consumer electronics, apparel, footwear, and accessories.

RRVL WOS, a wholly owned subsidiary of RRVL, has been recently incorporated to carry out various businesses including the businesses proposed to be transferred to RRVL WOS as part of the proposed combination.

Amazon, an investor in one of Future's holding companies, earlier managed to win an injunction from a Singapore arbitrator to halt Future's deal to sell retail assets to Reliance arm, saying that the Indian retailer group breached certain contract provisions it entered into last year in a separate deal with the US company.

Again, the e-commerce major also approached market regulator Securities and Exchange Board of India (Sebi), stock exchanges and CCI, urging them to consider the arbitration order and not approve the deal.

Image credit: The Hindu Business Line

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