Reliance Doubles the Footprint of its Retail Business, Announces the Acquisition of Future Group
- The acquisition of debt-strapped future group will nearly dual the footprint of its retail business.
- The oil-to-telecom firm announces the acquisition of future retail.
- The deal involves a merge of five units of the future group in future enterprises ltd.
The Reliance Industries Ltd has announced the acquisition of ‘Crown Jewel’ – future group businesses for Rs 24,713 crore, additional to its fast-expanding retail business and bolster e-commerce to take up on the competition. The takeover of reliance even includes the wholesale, logistics, and warehousing business of the future group.
Mukesh Ambani’s Reliance Retail Venture (RRVL) will be holding a 13.14% stake in Kishore Biyani’s Future Enterprises Ltd and will be taking over the debt of 12,500 crores.
With over an amount of 15,000 Crore in debt, the Kishore Biyani-founded Future Group and it has been seeking funding support for several months. The future retail operates 1550 stores and these flagship brands include BigBazaar, FBB and Food hall, Easy day, Heritage Fresh, and WHSmith. The future lifestyle fashion functions in 354 stores. The RIL-Future Group will add over 1,700 retail stores to Reliance’s footprints of 10,900 stores across groceries, electronics, and other forms.
The deal brings up potential collaborations from the increased geographic presence, refining sourcing efficiencies, and cost rationalization. HSBC said the acquisition indicates a clean acquisition of future retail, it will acquire a 13.1% shareholding in the remaining of FEL.
The deal allows reliance retail to almost dual its retail area under operation and increases the store count by 15%.
Reliance retail is now in a challenging position to take on Amazon or Flipkart, with this retail happening now, the action could be seen in D-Mart and Spencer stocks.
The deal will benefit Future Group and RIL’s shareholders by the future group going off and minority shareholders will be benefited strong profitability.
“The acquisition of the retail, wholesale, and supply chain business of the Future Group complements and makes a strong strategic fit into Reliance’s retail business. 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,” said Reliance Retail Ventures Ltd in its official statement.