Amazon has for months blocked the $3.4 billion sales of Future’s retail assets to rival Reliance, announced in 2020, citing a breach of certain contracts. Future denied any wrongdoing, and hopes had risen recently of an out-of-court settlement after Amazon and Future agreed to talks.
In the dispute between Amazon.com Inc and India’s Future Retail, amazon is failed to hold this deal. Now the U.S. group demand a return of at least $200 million it had invested in the Indian firm.
Two sources with direct knowledge of the settlement talks told Reuters that Amazon representatives informed Future the dispute could end if the U.S. company could get back at least $200 million it invested in a Future unit in 2019. The transaction is at the heart of ongoing legal disputes.
On Tuesday, the two sides told India’s Supreme Court, which is hearing the dispute. The talks had collapsed, and Amazon took out newspaper ads criticizing both Reliance and Future.
Future instead offered a stake of an equivalent amount in one of its remaining group companies after Reliance takes over most of its retail assets, saying it was financially distressing. But Amazon did not accept that, the sources said.
One of the sources said there were more factors at play during the talks. But Amazon’s demand for the return of investment was the “bare minimum” the U.S. company wanted.
Amazon vs Reliance on Future Group
Amazon.com Inc said talks have failed to resolve a bitter dispute over Future Retail (FRTL.NS) stores and accused both it and Reliance Industries (RELI.NS) of fraud in Indian newspaper ads on Tuesday.
The U.S. e-commerce giant has been contesting a $3.4 billion sale of Future Group’s retail assets to the Reliance conglomerate that was announced in 2020, and the case is currently before the Indian Supreme Court.
Amazon, which has a stake in a separate Future Group unit that it argues prevents Future from selling retail assets without its permission. It has called the supermarkets and other stores an “irreplaceable” network in a sector worth $900 billion in revenues annually.
Reliance’s takeover began with utmost stealth on the night of Feb. 25 when its staff began arriving at Future stores. Many in Future’s management were in the dark about the plans as store employees from all over the country frantically began to call, according to people with direct knowledge of the matter.
Although Reliance had not played a large public role in the legal dispute, it had, according to sources, for some months assumed many of the leases held by cash-strapped Future, India’s No. 2 retailer, and Amazon’s estranged business partner.
Reliance’s sudden possession of the stores appears to have landed what some analysts are calling a coup de grace. It spoils Amazon’s chances of untangling the transfer of Future’s assets to Reliance. That’s despite a series of legal battles won by the U.S. e-commerce giant to date blocking the 2020 deal announced between the two Indian companies.
