Business Tycoon Mukesh Ambani’s Reliance Industries is reportedly looking to acquire a controlling stake in the retail business of Kishore Biyani’s Future Group.
According to the reports, the deal will involve Kishore Biyani to relieve the control of all the businesses under the Future Retail Basket that comprises FBB, Big Bazaar, Food Hall, and Central. The deal is also going to release Biyani from the ownership of Future Lifestyle Ltd, and Future Supply Chain Solutions. All three entities are likely to be merged and brought under the control of Reliance Industries. However, Biyani will still hold control of the group’s FMCG business and other smaller group companies.
The deal is significant for Reliance Industries as it would guarantee a numero uno position for them in the retail chain across different categories such as fashion, general merchandise, and groceries. This becomes an added firepower to the already powerful Reliance Industries.
Deal Likely To Close Before 15 July
According to a report in the Times of India, the deal between Reliance Industries and Kishore Biyani is at an advanced stage. Reportedly, Reliance is pushing for the deal to close as early as possible, preferably before its Annual General Meeting that is scheduled to take place on the 15th of July. In the advanced stage, both companies are working on finer points and incentives for the deal.
The negotiations between the two companies began early this year after Biyani’s entities defaulted on some of its loans. Post that, Biyani held several meetings with investors in a bid to save the company. It is important to note that Biyani was once the poster boy of the retail sector and in a way a pioneer in that. Reportedly, even United States-based companies like Amazon had shown interest in acquiring a controlling stake in the Future group but the deal with Reliance offered a comprehensive solution to the debts of the company. A source close to the deal said,
“It is likely to be a complex transaction as, first, Future Group will announce a scheme of arrangement to merge into one company. Reliance is most likely to completely buy out this combined entity in exchange for its shares.”
Source: Business Today