Ambanis $3.5 billion deal gets approved amid Amazon lock call
India’s antitrust regulator has approved the acquisition of Future Retail by Reliance Industries for $ 3.5 billion, ignoring Amazon calls to block the deal.
The Indian Competition Commission has approved the transaction by Reliance Retail Ventures and Reliance Retail, the regulator said on Friday. Amazon, led by Jeff Bezos, had written to antitrust authorities and market regulators asking them to block the deal, alleging that the sale of Future to Mukesh Ambani, Asia’s richest man, violated a contract made with the American online retailer.
The antitrust approval intensifies Amazon’s fight against Reliance in the race to dominate the retail market in India, estimated at $ 1 trillion, where online shopping is gaining ground. For Amazon, the Indian partner has played a crucial role in strengthening its footprint after becoming the authorized online sales channel for Future Retail stores that sell everything from groceries to cosmetics and clothing.
The approval came on the day the Delhi High Court reserved its verdict on Future’s petition against Amazon, seeking to prevent the US company from interfering in the asset sale by writing to local antitrust authorities and regulators. of the market. Amazon has also accused Future and its founder Kishore Biyani of flouting the disclosure rules, according to court documents seen by Bloomberg.
Amazon bought 49% of one of Future’s unlisted companies last year, with the right to buy Future Retail’s flagship product after a few years. But the retailer suffered a serious cash flow crisis when India went into lockdown in March to stem the coronavirus outbreak.
In May, Amazon was considering increasing its stake in Future Retail, people familiar with the matter said at the time. But no such transaction materialized quickly, and Future struck a deal with Reliance, infuriating Amazon. The US firm says its contract with the unlisted Future unit has barred a transaction with a number of people and companies, including Ambani and Reliance.
