Amazon has accused a Future Group subsidiary of breach of contract and slapped it with a legal notice after the latter announced it would sell most of its retail, wholesale and logistics businesses to Reliance Retail, ET Now and Business Standard reported, citing anonymous sources. In 2019, Amazon had purchased a 49% stake in Future Coupons, the Future Group’s promoter entity, for ₹1,500–2,000 crore.
Under that deal, Amazon reportedly had a right of first refusal against deals with competitors like Reliance Retail. Amazon is said to be arguing that by selling off its wholesale, logistics and retail businesses to Reliance Retail, the Future Group violated its agreement with Amazon. Amazon confirmed the legal notice to TechCrunch but declined to go into specifics. We have reached out to Amazon, Reliance, and the Future Group for comment. Curiously, Amazon is reportedly exploring a multibillion dollar investment into Reliance Retail.
Reliance Retail’s acquisition of the Future Group’s businesses, which includes Big Bazaar and FBB, is a lump sum transaction at ₹24,713 crore. The deal is awaiting regulatory approval at the Competition Commission of India, and legal proceedings by Amazon, which may reportedly trigger arbitration, might prevent the transaction from taking place immediately. In a filing with the CCI, the companies said, “The proposed transaction will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India, irrespective of the manner in which the relevant markets are defined.”
- Reliance Retail gets investments worth ₹19,110 crore from private equity firm, sovereign funds
- Amazon to acquire 49% equity stake in Future Coupons