Reliance Retail acquires Future group for ₹ 24,713 crores

There had been a lot of speculation about this and finally, it’s announced as Reliance Retail Ventures Limited (RRVL), the subsidiary of Reliance Industries Limited has acquired the Retail & Wholesale Business and the Logistics & Warehousing Business from the Future Group. The deal has been done for lumpsum aggregate consideration of INR 24,713 crore.

This acquisition has been done as part of the scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL). So, as a part of the same scheme:

(i) the Retail & Wholesale Undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL;
(ii) the Logistics & Warehousing Undertaking is being transferred to RRVL; and
(iii) RRFLL also proposes to invest:
(a) INR 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09% of post-merger equity; and
(b) INR 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75% of the issue price, will result in RRFLL acquiring further 7.05% of FEL.

This acquisition will obviously help the Reliance Retail group to expand its retail business and use Future Group’s wholesale, and supply chain business. As per Reliance’s track record, they will make this acquisition a strong strategic fit into its own retail business.

Ms. Isha Ambani, Director, Reliance Retail Ventures Limited, said: “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. 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. We are committed to continuing to provide value to our consumers across the country.”

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. Future Group’s portfolio composition in apparel, general merchandise, and own FMCG brands will allow for a wider offering to its customers as well.

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