Amazon Takes Future Group To Singapore Arbitration Forum Over Reliance Retail Deal

Global ecommerce giant Amazon, which holds indirect stake in Future Group, has approached the Singapore International Arbitration Centre (SIAC) claiming that the proposed deal between Future Retail and Reliance Industries does not have its approval and hence should not go through.

Amazon had also served a legal notice to Kishore Biyani-backed Future Group for breach of contract by selling a significant portion of its business to Mukesh Ambani-led Reliance Retail.

Commenting on the same, Amazon spokesperson said, “We have initiated steps to enforce our contractual rights… As the matter is sub-judice, we can’t provide details.” Meanwhile, a source who is advising Future Group in this matter told PTI that Future Coupons received the notice and intends to settle this matter amicably through mediation or arbitration.

The development comes after Reliance Retail acquired a 30% stake in the retail, wholesale, logistics, and warehousing businesses of the Future Group for INR 24K Cr. Biyani’s Future Enterprises Ltd (FEL) will retain the manufacturing and distribution of FMCG goods, integrated fashion sourcing and manufacturing businesses, its insurance joint venture with Generali, and a joint venture with NTC Mills.

Meanwhile, Amazon had acquired a 49% stake in the promoter-entity of Future Retail called Future Coupon for around INR 1,500 Cr last year. It owns a 7.3% stake in Future Group, which led to Amazon acquiring around a 3.58% stake in the company too.

India’s antitrust watchdog the Competition Commission of India (CCI) is yet to review the offline and online aspects of the deal between Reliance and Future Group and their effect on the competition in the sector. The government body will give the final nod to the deal.

Meanwhile, Reliance Retail is looking to recreate Jio Platform’s massive funding streak from Reliance Retail. Since September, it has raised NR 37,710 Cr funding from Silver Lake, KKR, TPG Global, General Atlantic, Mubadala, GIC, TPG and UAE-based sovereign wealth fund Abu Dhabi Investment Authority (ADIA). Reliance Retail had last raised INR 5,512.50 Cr from ADIA for 1.20% equity stake on a fully diluted basis.

The funding will help Reliance Retail go digital and set up a large network of ecommerce. The company has also launched an online store, JioMart in December 2019 to take on Amazon in the ecommerce sector. Both platforms are trying to beef up their online offerings, in terms of product categories and discounts, ahead of the Diwali festive season.

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