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CCI approves Amazon-Samara’s acquisition of the supermarket chain More

The Competition Commission of India yesterday approved Samara Capital and Amazon’s joint acquisition of Aditya Birla Group’s More supermarket chains.

The CCI is expected to release a detailed order soon, per the Economic Times. Last week, the anti-trust regulator had sent a notice to Samara Capital seeking more detail on whether the joint acquisition was compliant with the government’s new FDI in e-commerce policy. Under the new policy, entities owned by the marketplace or its group companies cannot trade on the platform. The CCI’s queries were related to whether Amazon would be involved in More’s everyday operations and whether More would be integrated into Amazon India marketplaces.

Relief for Amazon in the CCI decision comes just days after it was reported that Amazon’s food retail arm, Amazon Retail India Pvt Ltd, may stop selling on the marketplace from 1 February, when the new FDI in e-commerce regulations kick in. Amazon had invested Rs 10.5 crore in Amazon Retail India, which is a vendor on Amazon Now and Amazon Pantry, over 6 months ago.

More’s 523 supermarkets

In September, Amazon announced that it would be investing in Witzig Advisory Services, which had signed an agreement to acquire the chain supermarket for Rs 4,200 crore and filed for CCI clearance. Amazon was to acquire a 49% stake in the company, while Samara would remain the controlling entity with a 51% stake. Note that Witzig is a wholly-owned subsidiary of Samara Alternative Investment Fund.

Aditya Birla Retail Ltd currently operates 523 More supermarkets and 20 hypermarkets selling FMCG, groceries, and daily consumer goods in hyperlocal stores. Note that More is already a seller on Amazon’s grocery delivery vertical Prime Now. With this acquisition, Amazon is likely looking at offline expansion, strengthening its retail arm and logistics.

Amazon’s investments in offline retail

  • Amazon previously invested in Shoppers Stop for a 5% stake in September 2017. After this, Shoppers Stop also began to sell its in-house brands on Amazon.
  • As of July 2018, Amazon India had 57 Fulfilment Centres in over 13 states, and further plans to open 10 more by the end of 2018.
  • As of November, Amazon was in advanced talks to acquire a 9.5% stake in Future Retail, which operates offline fashion and food chain stores BigBazaar and EasyDay. However, earlier this month, Business Today reported that the deal had fallen through, citing anonymous sources.

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