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Business

Reliance Industries arm to acquire Future Group's retail, wholesale, logistics, warehousing biz for Rs 24,713 crore

Updated : August 31, 2020 05:09 PM IST

The retail and wholesale undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL

The logistics and warehousing undertaking is being transferred to Reliance Retail Ventures Limited

Reliance Retail Ventures (RRVL), a subsidiary of Reliance Industries, today announced that it is acquiring the Kishore Biyani-promoted Future Group's retail, wholesale, logistics, and warehousing businesses on a slump sale basis for Rs 24,713 crore. A slump sale is when a business is sold for a lump sum consideration without values being assigned to the individual assets and liabilities. The deal value is subject to adjustments set out in the composite scheme of arrangement.

Under the scheme, Future Group will merge certain companies carrying on the abovementioned businesses into Future Enterprises Limited (FEL).

As part of the same Scheme:

(i) the retail and wholesale undertaking is being transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL;

(ii) the logistics and warehousing undertaking is being transferred to RRVL; and

(iii) RRFLL also proposes to invest:

(a) Rs 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09 percent of post-merger equity; and

(b) Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75 percent of the issue price, will result in RRFLL acquiring.

Ms. Isha Ambani, Director, Reliance Retail Ventures, 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.

We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands. We are committed to continue providing value to our consumers across the country."

The acquisition complements and makes a strong strategic fit into Reliance’s retail business, the Reliance Retail Ventures release said.

"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," the release said.

(This is a breaking story and will be updated)

(Disclaimer: Reliance Industries is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.)

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