Amazon serves legal notice on Future Group over failed deal
08 October 2020
Amazon has sent a legal notice to Future Group over a failed deal after Mukeshi Ambani’s reliance Retail acquired it in a cash-and-stock deal. Amazon has accused Future Group of breaching the terms of its contract by selling a significant portion of the business to Reliance Retail.
Amazon claims its purchase of a 49 per cent stake in Future Coupons, the promoter entity which owns a 7.3 per cent interest in Future Retail, the operator of more than 1,500 stores in India including grocery chain Big Bazaar.
This, according to Amazon, gave is a 3.58 per cent stake in Future Retail, and the right of first refusal to purchase more stake in Future Retail both directly as well as via entities.
However, Future Group announced in late August this year that it was selling its retail and wholesale business, as well as its logistics and warehousing business, to Reliance Retail for $3.4 billion.
ET Now, which first reported about the legal notice, said the deal between Amazon and Future Retail also restricted the Indian firm from entering into a deal with certain firms
The legal notice comes amidst reports of Amazon preparing to acquire a multi-billion-dollar stake in Reliance Retail, India’s largest retail chain, according to earlier reports.
With the undermining of deal with Future Group, the US e-commerce firm needs to have a deal with Reliance Retail for securing its future in India. Amazon has invested more than $6.5 billion in its local business in the country.
Reliance Retail which serves more than 3.5 million customers each weekthrough its nearly 12,000 physical stores in more than 6,500 cities, has raised about $5.14 billion by selling about an 8.5 per cent stake in its business to a host of investors, including Silver Lake, Singapore’s GIC, General Atlantic and others, in the past four weeks.
Opens train ticket window
Amazon India, meanwhile, has partnered with Indian Railway Catering and Tourism Corporation (IRCTC) to provide its customers with the facility to book reserved train tickets on Amazon. Customers will get a 10 per cent cashback of up to Rs100 on their first train ticket booking and Prime members can avail 12 per cent cashback of up to Rs120 for these bookings. This offer is valid for a limited period of time.
For the introductory period, Amazon.in has also waived off service and payment gateway transaction charges. With this launch, Amazon Pay adds another travel category, thereby offering its customers a one-stop-shop for booking flights, bus and train tickets.
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