InvestorQ : What is the latest on the ongoing turf war between Amazon and the Future group over the RIL deal?
diksha shah made post

What is the latest on the ongoing turf war between Amazon and the Future group over the RIL deal?

2 years ago

The war between Amazon and Future group is only escalating even as Reliance has stayed in the sidelines through the entire fracas. It has virtually left it to Amazon and Future group to internally resolve the matter since it apparently pertains to a deal between Future Coupon, part of the Future group, and Amazon of the US.

In the last few days, the ongoing battle between Future Group and Amazon over the sale of the Futures Group business to Reliance Retail seems to be assuming a new dimension. In the latest development, Amazon has written to the capital market regulator SEBI requesting not to issue the no-objection certificate or NOC for the $3.4 billion deal.

The deal between Future Retail and Reliance Retail was signed way back in September 2020 but has been stuck in legal wrangles for quite some time with Amazon keen to acquire its pound of flesh in the entire bargain. As per Amazon, they already hold a stake in Future Coupons, which is a subsidiary of the Future group.

According to Amazon, the deal required that Amazon should have been given the right of first refusal, which was not done when Future group sold off all its businesses to Reliance Retail, including retail and wholesale. In the latest development, Amazon has urged SEBI to instruct the two stock exchanges not to issue the NOC to the deal.

Earlier, the Delhi HC approved the merger of RRIL and Future Enterprises but had simultaneously allowed Amazon the freedom to challenge the merger in court. At that point of time, Future group had sought a stay from the court on Amazon opposing the deal but the Delhi High Court had struck down that request as being against the rights of Amazon.

Amazon has pointed out that despite clear directions in the single judge order; Future Retail had tried to mislead the regulators into giving them the NOC for the deal. Future group is desperate to fulfil the deal as it gives them escape from a debt trap. The next hearing on the matter is scheduled on 12-Feb and FRL needs to file its response.