Reliance Retail has reportedly reached an agreement with Future Group to acquire the latter’s retail, logistics and warehousing businesses. The cost of the deal is $3.4 billion. The deal is significant in the Indian retail space as it will propel Reliance Retail to become the leading company which will have control over one-third of bricks-and-mortar stores in the country.
Future Group has had a long journey and grown to become a leading company in India. It has millions of customers in the Southeast Asian country. Iconic brands like Big Bazaar, Foodhall, and Brand Factory come under Future Group’s retail business.
But the company has been debt-ridden for a while. Kishore Biyani-led Future Group has been under great pressure from the lenders’ consortium to address its debt-related issues. The acquisition by Reliance Retail will help the company erase its debt.
The deal is also a significant blow to Amazon which had previously shown interest in Future Retail. Last year, Amazon had bought a small portion of Future Group’s business.
More importantly for Reliance Retail, the deal will position it as the leader in the organized retail segment. Reliance Retail Ventures Ltd said in a statement, “The acquisition of the retail, wholesale and supply chain business of the Future Group complements and makes a strong strategic fit into Reliance’s retail business. This will help Reliance retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times.”
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