Shares of Future Group companies jumped 5 per cent after stock exchanges approved the group’s Rs 24,713 crore-deal to sell its retail assets to Mukesh Ambani-led conglomerate Reliance Industries. The approval takes Future, which operates supermarkets like Big Bazaar and high-end food stores such as Foodhall, a step closer towards sealing a deal that will create country’s groceries market leader.
In August 2020, Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries, had announced that it was acquiring the retail and wholesale business, logistics and warehousing business from the Future Group as going concerns for lumpsum aggregate consideration of Rs 24,713 crore.
The deal had soured ties with Future’s business partner Amazon.com Inc, which alleged the transaction breached agreements with Future made in 2019. Amazon raised legal and regulatory challenges to the deal.
Future Retail shares, which soared in August after the deal was announced, ended 2020 around 77 per cent lower on Amazon’s challenge.
The exchanges said they reached the decision after communicating with markets regulator, the Securities and Exchange Board of India.
Future Group founder and Chief Executive Kishore Biyani said earlier this month the conglomerate expects swift regulatory approval of the deal, after a New Delhi court last month left the fate of the transaction with regulators.
“Thousands of jobs, payments to suppliers and customer fulfillment happens when a company like Future Group is assured of business continuity,” said Kumar Rajagopalan, CEO, Retailers Association of India.
Future Retail shares rose 4.9 per cent to a one-month high on Thursday, while Reliance shares jumped 2.7% to its highest in nearly three months, boosting the benchmark indexes.