Economy

Reliance Future Group Deal: Amazon gets Indian court to block $ 3.3bn retail deal involving Mukesh Ambani

Reliance Future Group Deal: Amazon gets Indian court to block $ 3.3bn retail deal involving Mukesh Ambani
Court in the country’s capital New Delhi, She ruled on Tuesday An agreement between Reliance Industries to buy local competitor Future Retail for $ 3.3 billion should then be put on hold Amazon (AMZN) I objected to it last year. The Delhi High Court said it was “convinced that immediate orders are necessary to protect rights.” [Amazon]He ordered all parties involved in the deal to “preserve the status quo” pending its final ruling.

“We have the utmost respect for the Indian legal system and we appreciate the interim order of the Delhi Supreme Court,” an Amazon spokesperson told CNN Business.

Future Retail said in a statement She will “explore all legal remedies and take appropriate steps to pursue” her dealings with Reliance. The company can appeal any ruling in a higher court.

Reliance declined to comment.

The verdict is the latest development in what is shaping up to be a proxy battle between two of the world’s richest men for India’s fast-growing online retail market. What is at stake is strategic access to a network of popular grocery stores and retail stores in India, something that both Amazon and Jeff Bezos’s Reliance have. The richest man in India is Mukesh Ambani – They either want to possess for themselves, or to prevent the other from acquiring.
At the center of the current battlefield is Future Retail, the cash cow of the Indian Future Group. The retail unit houses brands like Big Bazaar, which is a popular chain of stores. In August 2019, Amazon Invested in the future group entity Which gave it around 4.8% of Future Retail’s shares as of September 30 last year, According to securities deposits. The deal gave Amazon the first right of refusal to acquire more shares in Future Retail, he said One of the deposits.

Amazon argued that the 2019 deal it struck with the Future Group entity included a non-competitive clause, a person familiar with Amazon’s perspective told CNN Business in October of last year. The person said the clause listed 30 banned parties that Future Retail and Future Group could not do business with, and Reliance was on that list.

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Amazon sought to enforce this agreement through the Singapore International Arbitration Center (SIAC), as the Southeast Asian country is often seen as a neutral jurisdiction to settle disputes. The SIAC emergency arbitrator ordered a temporary halt to the deal last October.

While Future Group raised questions about the validity of the order of the Singapore Court of Arbitration in India, the Delhi High Court on Tuesday declared the order “enforceable”.

He might hold the tech-winning card, and Silicon Valley knows it
Amazon and Walmart (WMT)Flipkart owned by Flipkart dominates online shopping in India, and controls more than 60% of the market in between. But Ambani and Reliance did a strong mission to a slice of that market with JioMart, an initiative announced in 2019 to bring thousands of Indian stores known as “kiranas” online.

Ambani definitely has the resources to match Amazon. Its technology subsidiary, Jio, has over 400 million users and Reliance Retail has more than 12,000 stores across India.

According to analysts, Future Retail’s 1,500 single stores are It doesn’t have to be For either company, however, the legal conflict could turn into a “vanity battle” between billionaires.

And while it’s currently a feature of Amazon, this battle isn’t over yet.

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