On Sunday, a deal was signed between Mukesh Ambani-led Reliance Retail and Kishore Biyani’s Future Enterprises. According to the deal, RIL’s subsidiary Reliance Retail Ventures Limited (RRVL), will be acquiring the retail & wholesale business and the logistics & warehousing business from the Future Group on a slump sale basis for Rs 24,713 crore.
It has been notified on Saturday through a press release that the deal is subjected to adjustments as set-out in the composite scheme of arrangement (Scheme), and said “The above acquisition is being done as part of the Scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL).” The retail and wholesale business of Future Group will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL) as per the agreement.
Moreover, in order to acquire 6.09 per cent of conversion and payment of balance 75 per cent of the issue price post-merger equity, RRFLL has proposes to invest Rs 1,200 crore in equity shares of FEL. After conversion and payment of balance 75 per cent of the issue price, the company will also invest Rs 400 crore in a preferential issue of equity warrants to acquire further 7.05 per cent stake in FEL.
The Director of Reliance Retail Ventures, Isha Ambani told media “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 kiranasas well as large consumer brands. We are committed to continue providing value to our consumers across the country.” RIL says that the retail, wholesale and supply chain business of the Future Group, which has been acquired by RIL, complements and makes a strong strategic fit into Reliance’s retail business.
It further says that Reliance retail will be facilitated to boost the millions of small merchants in gaining support to increase their income in these trying times owing to COVID-19.