The Competition Commission of India(CCI) approved Reliance Retail’s acquisition of Future Group’s retail assets on Friday.
What happened with the deal?
In October, Amazon sent a legal notice to the Future Group and approached the SIAC alleging breach of contract.
Amazon had bought a 49% stake in promoter holding company Future Coupons for Rs 1,500 crore last year to indirectly own a 5% stake in Future Retail Ltd.
Amazon says Future cannot sell any shares of FRL to Reliance or any other competitor apart from the US company as it has the right of first refusal.
SIAC said in its interim ruling that the sale to Reliance should be put on hold until it issues a final order.
It also restrained the Future Group from transferring or pledging any shares of Future Retail without Amazon’s permission.
Amazon has asked Sebi to investigate FRL for insider trading and breach of confidentiality.
How many approvals required for this deal?
The deal requires approvals from CCI, The Securities and Exchange Board of India (Sebi) and The National Company Law Tribunal (NCLT) in addition to no objection certificates from creditors and minority shareholders.
How CCI approved?
Based on the retail assessment framework, the commission’s finding is that the deal does not have an appreciable adverse effect on competition.
The assessment took two months as the CCI had asked the parties for clarifications during the process.
Future Group approached High Court
Future Retail Ltd (FRL) has asked the Delhi High Court to stop Amazon from moving regulators against the deal. It has argued that the SIAC order was not binding and enforceable in India.
Reliance Retail Ventures will acquire the retail assets of Future Group in a deal that will see five listed entities, including Future Retail, folded into Future Enterprises Ltd (FEL)
The retail business will then be transferred to Reliance in a slump sale for nearly Rs Rs 24,713 crore, obviating the need for a stake sale.
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