Rahul Sachitanand
Aug 31, 2020

Reliance Retail to acquire Future Group for $3.4 billion

Acquisition of Future Group, the owner of the Big Bazaar brand among others, is expected to give Reliance access to a third of India's organised retail market.

Reliance Retail to acquire Future Group for $3.4 billion

After having been overtaken by Amazon and Walmart-owned Flipkart in online commerce, India's Future Group has seen its debt-laden retail ambitions cave into the onslaught from Mukesh Ambani's Reliance Industries. The Reliance conglomerate, which owns ventures in diverse industries ranging from petrochemicals to mobile services and retail, announced over the weekend that it would be acquiring Future's retail assets for $3.4 billion. 

This deal will help Kishore Biyani, once regarded as India's raja (or king) of retail cut his debt by over $2 billion, according to news reports. On the other hand, the deal will give Ambani's Reliance access to over 1500 stores across formats such as Big Bazaar, Easy Day, Central and Foodhall. 

L-R: Mukesh Ambani, chairman of Reliance Industries and Kishore Biyani, CEO and founder of Future Group.

Already, Reliance Retail is India's largest organised retailer, and in a market dominated by mom-and-pop retail stores, this deal will help Reliance corner a third of India's fragmented market. 

“We are pleased to provide a home to the renowned formats and brands of Future Group as well as preserve its business ecosystem, which have played an important role in the evolution of modern retail in India,” said Isha Amabni, director at Reliance Retail and daughter of Mukesh Ambani, in a statement. “We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands.” 

According to a company statement, Reliance Retail will acquire the retail and wholesale business and the logistics and warehousing operations of Future Group. Then, the retail and wholesale businesses will be merged with Reliance Retail and Fashion Lifestyle, a subsidiary of Reliance Retail, and the logistics and warehousing would merge with the buyer.

Amazon's plans for growth in India are clearly a major motivation for Reliance in making this deal. Incidentally, Amazon owns a stake in Future Retail thanks to an earlier deal where it, along with private equity fund Premji Invest, paid $197 million for a 49% stake in Future Coupons, one of the shareholders in Future Retail.

Related Articles

Just Published

5 hours ago

Discovery acquires ad-tech start-up AdSparx in India

Also absorbs team of Novix Media Technologies.

6 hours ago

Lin the Pangolin animates a conversation about ...

Arnold creates a cartoon spokes-creature to forge an emotional connection for the threatened species.

6 hours ago

Facebook takes down networks in China and The ...

More than 155 accounts removed for what the company calls coordinated inauthentic behaviour.

15 hours ago

Asia-driven esports growth offers new opportunities ...

With the pandemic driving people indoors, gamers have responded by turning to esports in droves across APAC, creating a potentially lucrative opportunity for brands.