Why is Bezos and Ambani so keen on acquiring Future Retail?

Both Amazon and Reliance industries are keen on acquiring Future Retail. When Reliance proposed a deal to Future Retail for Rs 24,713 crores, the company agreed to sell all its assets to Reliance. Mukesh Ambani even structured the contract in such a way that Amazon cannot have any stake in the Retail company. But, now as Amazon has obtained an emergency order from SIAC to stop the deal, the companies say they are in process to execute it.

Mukesh Ambani even said that the deal is structured legally and is completely enforceable under Indian law. Kishore Biyani from Future Retail also said that they are in the process to execute the deal without any delay.

Why Bezos and Ambani want to acquire Future Retail?

The current price that Future Retail is selling for is great. COVID has given a serious hit to the company and its business. With over 2000 stores across India, the company has recorded over 600 million visits over the years. Reliance or Ambani’s moto to acquire the company is to compete with the likes of Amazon, Flipkart and other e-commerce sites in the country.

Image Source: The Indian Express

Speaking about the same during the planned acquisition Isha Ambani 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 continue providing value to our consumers across the country.”

At the same time, Bezos’s motive to buy the company must be to strengthen its position in India. But at this point, it seems difficult for the company to do so.

What’s next for the companies?

Future Retail Company Analysis – Inside Simple Finance
Image Source: Inside Simple Finance

After Ambani proposed the deal in a way that Amazon cannot have a stake in Future Retail, Amazon retaliated back with an emergency stay order from SIAC. But the thing is under Indian Law the deal is entirely legal, and Reliance Industries and Future Retail need not comply with SIAC. Since SIAC’s is a body providing non-dispute solutions, their orders are not concrete unless enforced by law.

Therefore, we might soon see the deal between Future Retail and Reliance go ahead. In an attempt to null the SIAC order Future Retail has also appealed to the Delhi High court.

Who do you think will finally succeed in acquiring Future Retail? Let us know in the comments below. Personally, I think it will be Reliance. If you found our content informative, do like and share it with your friends.

Also Read: Mukesh Ambani made sure Amazon stays away from Future group and Reliance