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Amazon may soon acquire 10% stake in Future Retail

Aug 14, 2019 by The Passage Team
Amazon may soon acquire 10% stake in Future Retail

Amazon is in talks to acquire 10% equity in Future Retail Ltd, Livemint reported citing people in the know. Future is seeking a valuation of USD 281 million from Amazon for the stake, the sources added.

Future Retail–with its grocery chain ‘Big Bazaar’- is India’s second largest retailer. The Seattle-based tech company is aiming to strengthen its brick-and-mortar presence in India in the wake of Walmart’s Flipkart acquisition.

The Jeff Besos-company was also in talks to buy stakes in India’s biggest offline retailer, Reliance Industries. Earlier, Amazon had picked up stakes in Shoppers Stop Ltd and grocery chain More.

Last year, Future Group founder Kishore Biyani had announced he would sell a minority stake to a global retailer. However, he didn’t mention Amazon specifically.

The US tech giant started the negotiations with the Biyani-led group in early 2018 before it went astray when the Indian government announced the new FDI norms for e-commerce companies last December. The talks were rekindled in the late last February and started working on a deal structure in compliance with the new ecommerce policy.

According to consultant Technopak Advisors, India’s retail market is set to hit USD 188 billion by 2023, up from USD 79 billion last year.

A couple of months back, Future Group started listing its brands on Amazon in categories such as fashion, grocery and electronics among others. The move was interpreted as a harbinger to the upcoming stake sale deal with Amazon.

Future Retail said the company’s key shareholders including the promoter family and another group firm Future Coupons have entered into a shareholders’ agreement, allowing the latter to attend board meetings and also have key shareholders’ rights, including stake-sale and purchase decisions, Economic Times reported. The move is seen as a precursor to Future Retail’s impending stake sale to Amazon through a holding company.

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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