On Saturday, Mukesh Ambani who lead Reliance Industries announced the acquisition of the Future Groups’ retail, wholesale, logistics, and warehousing. The acquisition will be for Rs. 24,713 crore through its subsidiary, Reliance Retail Ventures.
In a regulatory filing, Reliance Industries said that the deal is a part of the scheme in which Future Group is merging certain group companies into Future Enterprises, and subject to regulatory and shareholder approvals. The deal’s transaction had been in work for months.
RIL said that acquisition of the Future Group’s businesses makes a strategic fit into its business of retail.
However, the warehousing and the logistics units of Future Group will be in the hands of Reliance Retail Ventures, and the wholesale part will be part of RIL’s wholly-owned arm, Reliance Retail and Fashion Lifestyle.
“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 has played an important role in the evolution of modern retail in India,” said Isha Ambani, director, Reliance Retail Ventures.
Kishore Biyani owner of Future Group has supermarket chains like Big Bazaar, upmarket food stores Foodhall, and bargain clothing chain Brand Factory.
According to Reliance Industries, portfolio of Future’s Group in general merchandising, apparel, and fast-moving consumer goods brands will provide a broader offering to its customers.
The deal of Reliance Retail with Future Group will accelerate and provide “support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times, the company added.
“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,” she added.
In June, Reliance Retail Ventures became net-debt free much before their set aim of March 2021.
Reliance Industries has been diversifying its business and ramping up a retail presence. It launched an online grocery service JioMart in May, a move rivalling Amazon and Walmart’s Flipkart in India, a key growth market for e-commerce.
RIL has raised this year more than Rs.2 lakh crore through their stakes sale in Reliance Jio to major investors like Google and Facebook.