Reliance Retail Acquires Future Group's Retail Business
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Further keeping his promise to expand into retail, Mukesh Ambani-led Reliance Industries Limited on Saturday announced that it is acquiring Future Group’s business for INR 24,713 crore.
“Reliance Retail Ventures Limited (RRVL), subsidiary of Reliance Industries Limited, today announced that it is acquiring the Retail & Wholesale Business and the Logistics & Warehousing Business from the Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of INR 24,713 crore,” the company said in a statement.
As a part of the deal, RRVL has proposed to invest INR 1200 crore in the preferential issue of equity shares of Future Enterprises Limited (FEL) to acquire 6.09 per cent of post-merger equity and INR 400 crore in the preferential issue of equity warrants which upon conversion and payment of balance 75 per cent of the issue price will allow RRVL to acquire 7.05 per cent more of FEL.
This deal will allow Reliance to take over around 1,800 brick and mortar store of Future Group which includes Big Bazaar, Nilgiris, Central, Brand Factory, and FoodHall among others. Reliance currently operates around 11,500 stores at over 6,600 plus towns and cities.
Commenting on the latest development, Isha Ambani, director, RRVL,said, "With this transaction, 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. 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. We are committed to continue providing value to our consumers across the country."
Ten days back, Reliance retail forayed into pharmaceutical and healthcare by acquiring a majority equity stake in Chennai-based Vitalic Health Pvt. Ltd and its subsidiaries for approximately INR 620 crore to compete against e-commerce giant’s Amazon.