Mukesh Ambani’s Reliance Industries Ltd has announced the acquisition of Kishore Biyani’s Future Group to expand its retail business and bolster e-commerce. However, the deal has run into legal trouble with global e-commerce giant Amazon which says the deal was a violation of a non-compete clause and a right-of-first-refusal pact it had signed with the Future Group earlier.

Reliance Retail Ventures Limited (RRVL) is a Reliance Industries Limited (RIL) subsidiary company and having a presence in the business of supply chain management for retail. RRVL is a holding company for the retail business of RIL.

Reliance Retail and Fashion Lifestyle Limited (RRFLL) is Wholly owned subsidiary (WoS) of RRVL and is in the business of dealing in all kinds of goods and managing & operating stores and malls etc. The Company is incorporated for this transaction and will take over entire retail business of Future group.

Future Group includes 20 companies of future group which are party to this transaction. These 20 companies include 6 listed companies namely Future Enterprise Limited (FEL), Future Consumer Limited (FCL), Future Lifestyle Fashions Limited (FLFL), Future Market Network Limited (FMNL), Future Supply Chain Solutions Limited (FSCSL) and Future Retail Limited (FRL). The remaining companies are wholly owned subsidiary of Future Bazaar India Limited (FBIL) which in turn is a wholly-owned subsidiary of FEL. These companies are engaged in FMCG, Fashion Products, clothing, wholesale, retail and logistic infrastructure and warehousing.

Reliance Retail Limited (RRL) is WoS of RRVL and the company is engaged in organized retail spanning across various consumption baskets primarily catering to Indian consumers. RIL’s entire current retail business is carried through RRL.

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The Transaction

On 29th August 2020, RIL announced taking over the entire retail and logistic business of Future Group through slump Sale. The transaction will be structured as:

  • Step 1: Consolidation of Retail & Logistic business of Future group to FEL
  • Step 2: Slump Sale of Retail & Logistic Undertaking of FEL (Post-Consolidation) to Reliance group.
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Interestingly, the purchase of business of Future Group will be done through 2 different slump sales:

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