News By/Courtesy: ANSHIKA JAIN | 01 Sep 2020 7:32am IST

HIGHLIGHTS

  • Reliance Retail Ventures Limited to acquire retail, wholesale, logistics and warehousing businesses from the Future Group
  • The acquisition would be on a going concern basis
  • The total consideration for acquisition would be Rs. 24,713 crore

Reliance Retail Ventures Limited (RRVL) which is a subsidiary of Reliance Industries Limited (RIL) had recently announced that it would be acquiring the entire retail, logistics, wholesale, and warehousing businesses from the Future Group. The acquisition would be on a going concern basis and for a total consideration of Rs. 24,713 crore. 

The acquisition would mean the exit of the ‘retail king’ of India, Kishore Biyani, who is the founder of the Future Group after three decades. The acquisition would consolidate Ambani’s position in the Indian retail industry and would also pose increased competition to existing brick and mortar companies like Aditya Birla Fashion and D-Mart. The merger would help Kishore Biyani to get rid of his debts both at the promoter level as well as in the listed entities which were hit hard by the ongoing coronavirus pandemic.

Reliance mentioned in a statement that the acquisition is done as a part of the merger scheme wherein Future Group is merging certain companies into the Future Enterprises Limited (FEL). The companies include Future Retail Limited, Future Consumers Limited, Future Supply Chain Solutions Limited, Future Lifestyle Fashion Limited, Future Brands Limited, and Future Market Network Limited. Subsequently, the logistics and warehousing undertaking will be transferred to RRVL, whereas the retail and wholesale undertaking will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL.

Isha Ambani, Director of Reliance Retail mentioned that the merger would provide a home to the renowned brands and formats of the Future Group and would also preserve its business ecosystem. She further mentioned that with the merger the growth momentum of the retail industry would continue with the unique model of active collaboration with small merchants as well as large consumer brands.

The statement from RIL mentioned that the acquisition of the wholesale, retail, and supply chain business of the Future Group makes for a strong strategic fit into Reliance’s retail business. The merger would help Reliance retail to advance thereby providing support to millions of small merchants in increasing their competitiveness and enhancing their income during these tough times.

Post-merger, apart from its insurance JVs with Generali and JVs with NTC Mills, FEL will also retain few manufacturing and distribution units of FMCG goods.

 

This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1)(A) and other related laws being enforced in India for the time being.

Section Editor: Pushpit Singh | 02 Sep 2020 10:22am IST


Tags : #RelianceRetail #FutureGroup #24713crore #Merger

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