Mumbai: The U.S e-commerce giant Amazon on Sunday secured interim relief by stalling partner Future Group’s plan to sell its retail and wholesale assets to rival Reliance Industries Ltd for ₹24,713 crores ($3.4 billion approximately). An arbitration court in Singapore restrained the Biyani-led conglomerate from going ahead with the sale.
The e-commerce giant claimed that Future Group had violated an investment contract when it agreed to sell its retail assets to Reliance Retail Ventures Ltd (RRVL).
In a statement issued late Sunday in Mumbai, the Amazon said it got all the relief it sought, without providing specifics. “We welcome the award of the Emergency Arbitrator,” Amazon said. “We remain committed to an expeditious conclusion of the arbitration process.”
The ruling marks some respite for Amazon as it seeks to halt a deal that could give Ambani, Asia’s richest man, unparalleled dominance in the race for India’s estimated $1 trillion consumer retail market. Reliance is already India’s biggest brick-and-mortar retailer and has ambitious plans for the online segment that would see it take on Amazon in what is a rising market.
Blocking Reliance’s rising stronghold on India’s retail sector is crucial for Amazon if it wants to dominate the only billion-plus consumer market that’s still open to foreign firms.
In a deal announced on 29 August, Reliance Retail Ventures said it would acquire retail, wholesale, logistics and warehousing businesses of the Future Group. “RRVL has entered into the transaction for the acquisition of assets and business of Future Retail Ltd under proper legal advice and the rights and obligations are fully enforceable under Indian law,” Reliance Retail said in a statement late Sunday.
The deal would have been a bailout for Future, which faces another potential cash crunch as competition in the Indian retail space intensifies and the economy slows amid the COVID-19 pandemic.
Amazon agreed to purchase 49 per cent of one of Future’s unlisted firms last year, with the right to buy into their flagship, Future Retail, after a period of between three and 10 years. Amazon was considering increasing its stake in Future’s retail unit, but that transaction didn’t materialize in time. Future instead cut a deal with Ambani’s refining-to-retail conglomerate.