The acquisition has been done as part of the scheme in which Future Group is merging certain companies into Future Enterprises Limited (FEL)
Mukesh Ambani-led Reliance Industries’ subsidiary Reliance Retail Ventures Limited (RRVL) announced to acquire the Retail & Wholesale Business and the Logistics & Warehousing Business from the Future Group in a mega transaction for Rs 24,713 crore. The acquisition has been done as part of the scheme in which Future Group is merging certain companies including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks into Future Enterprises Limited (FEL). Future Enterprises will subsequently sell by way of a slump sale the retail and wholesale business such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of Reliance Retail Ventures Limited (RRVL).
Under this scheme, Future Enterprises’ Retail & Wholesale Undertaking has been transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL; further, Future group’s Logistics & Warehousing Undertaking transferred to RRVL. Reliance Retail and Fashion Lifestyle has also proposed to invest Rs 1,200 crore in the preferential issue of equity shares of Future Enterprises to acquire 6.09 per cent of post-merger equity; and Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75 per cent of the issue price, will result in Reliance Retail and Fashion Lifestyle acquiring further 7.05 per cent of Future Enterprises.
RIL in a press release said that the acquisition of the retail, wholesale and supply chain business of the Future Group will complement and make a strong strategic fit into Reliance’s retail business. The company believes that this acquisition 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.
This acquisition is subject to market regulator SEBI, CCI, NCLT, shareholders, creditors and other requisite approvals. “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 have played an important role in the evolution of modern retail in India,” said Isha Ambani, Director, Reliance Retail Ventures Limited.
Kishore Biyani, Group CEO, Future Group said that as a result of this reorganisation and transaction, Future Group will achieve a holistic solution to the challenges that have been caused by COVID and the macroeconomic environment. “This transaction takes into account the interest of all its stakeholders including lenders, shareholders, creditors, suppliers and employees giving continuity to all its businesses,” Kishore Biyani said.