Reliance-Future deal gets clearance from Sebi

(Sebi) provided clearance to the Reliance Retail’s acquisition of Future Group’s retail assets. The ₹ 24,713-crore deal gained approval despite objections raised by Amazon. Besides Sebi, Bombay Stock Exchange (BSE) also granted its nod to the deal with “no adverse observation” report. 

The deal was originally finalized in August, last year, when Mukesh Ambani’s RIL decided to acquire Kishore Biyani-led Future Group’s retail business. Future Group sold its retail assets to RIL due to a slump in sales, which was the consequence of the coronavirus pandemic. As per the agreement, Future Group’s retail and wholesale undertaking would move into Reliance Retail and Fashion Lifestyle Limited (RRFLL), a subsidiary of Reliance Retail Ventures Ltd (RRVL). It added that logistics and warehousing undertaking would be directly transferred to RRVL. 

The multi-crore deal between the two companies awaited go-ahead from the market regulators as the global e-commerce giant raised objections towards the deal. Amazon said the Future Group’s agreement with RIL violated the pact it signed with the Future Group. Amazon highlighted the violation of non-complete clause and right-of-first-refusal pact. The Amazon’s agreement with the Future Group also demanded latter to inform the online seller before finalising any sale agreement with a third party. Amazon owns 49% stake in Future Coupons Pvt Ltd (FCPL), a Future Group holding company.

“The details of the complaints made by Amazon, the submissions of Future Retail Limited and the counter submissions of Amazon and all the proceedings pending and completed in the Delhi High Court and the award of emergency Arbitrator in the Singapore International Arbitration Centre should be brought to the notice of the shareholders of the listed entities involved in the scheme while taking shareholder approval on the scheme. Also, the details should also be brought to the notice of NCLT while filing the draft scheme for their approval,” BSE said in its observation letter. 

The stock exchange added that the company would have to inform its shareholders about any future disputes, complaints, regulatory actions or proceedings, or orders involving the draft scheme before the approval by NCLT. The Future Group, which already received clearance from the Competition Commission of India (CCI) for the deal, now only required approval from NCLT along with no-objection certificates from creditors and minority shareholders.

On Thursday morning, post the clearance from Sebi, both the companies witnessed a surge in their stock value. The shares price of Reliance industries went up by 3.07 percent to Rs 2118.00 per stock on the BSE, while on the National Stock Exchange (NSE) it rose by 3.08 percent to Rs 2,118.00 per share. The Future Retail shares also gained 5 percent on both the exchanges. On the BSE it reached Rs 81.35, while on NSE its share price hit Rs 80.65.