InvestorQ : What is the significance of the Delhi High Court refusing to stay the merger deal between Future Group and Reliance Retail?
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What is the significance of the Delhi High Court refusing to stay the merger deal between Future Group and Reliance Retail?

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3 months ago
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In what could be a setback for Amazon and a morale booster for the Reliance / Future merger deal, the Delhi High Court overturned an order stalling the $3.4 billion deal. It may be recollected that Amazon had managed to convince the court to stale the sale of retail assets of Future group to Reliance Retail.

In fact, Amazon had challenged the sale as they opined that it would deplete the value of their investment in Future Coupons. Amazon had taken a stake in Future Coupons a few years back and that is the bone of contention. While Amazon claims it gives them the right to be consulted before key decisions, Future group has denied any such agreement.

Last week, in a significant move, the court had taken the side of Amazon and put Future's RRVL deal on hold. Incidentally, they had called for a status quo on the deal till the time the final judgment was passed. Future group had already appealed against this order of the court saying that its creditors would be at significant risk if the deal failed.

Neither company has made any public statement in this regard due to the matter being sub-judice. However, it is certainly a setback for Amazon which had made allegations against the Future group and its promoters. In the past, Biyani consistently denied such allegations. One view in the market is also that Amazon may be just trying to push the deal to a corner, considering its implications for retail competition. 

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