Reliance Industries Ltd Announced the acquisition of Future Group business for Rs 24,713 crore
Mukesh Ambani's Reliance Industries Ltd on Saturday announced the acquisition of Future Group businesses for Rs 24,713 crore to add to its fast-expanding retail business and bolster e-commerce to take on the competition from Amazon.com.
Mukesh Ambani's Reliance Industries Ltd on Saturday announced the acquisition of Future Group businesses for Rs 24,713 crore to add to its fast-expanding retail business and bolster e-commerce to take on the competition from Amazon.com. In a statement, the company said, "Reliance Retail Ventures Ltd (RRVL), subsidiary of Reliance Industries Ltd will acquire the retail and wholesale business and the logistics and warehousing business from the Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of Rs 24,713 crore."
SOME IMPORTANT HIGHLIGHTS
- The logistics and warehousing undertaking is being transferred to RRVL and RRFLL also proposes to invest Rs 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09 per cent of post-merger equity and Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75 per cent of the issue price, will result in RRFLL acquiring further 7.05 per cent of FEL.
- The above acquisition is being done as part of the scheme in which the Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL).
- As a part of the same scheme, the retail and wholesale undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL.
- Hypermarket & Supermarket, lifestyle and consumer electronics are some of the components of the Future Group Retail business.
- This acquisition is subject to SEBI, CCI, NCLT, shareholders, creditors and other requisite approvals. Reliance Retail Ventures Limited (RRVL) is a subsidiary of Reliance Industries Limited, carrying on the Consumer Supply Chain Business and Consumer Retail Business through its subsidiaries.
- Future Group's portfolio composition in apparel, general merchandise and own FMCG brands will allow for a wider offering to its customers.
- Isha Ambani, Director, Reliance Retail Ventures Limited, said"With this transaction, we are pleased to provide a home to the renowned formats and brands of Future Group as well as preserve its business ecosystem, which have played an important role in the evolution of modern retail in India.
- RRVL reported a consolidated turnover of Rs 1.62 lakh crore and net profit of Rs 5,448 crore for the year ended March 31, 2020.
- The acquisition of the retail, wholesale and supply chain business of the Future Group complements and makes a strong strategic fit into Reliance's retail business.
- This will help Reliance retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times.