Reliance Retail Venture Limited (RRVL) has received a green signal from Indian regulators to go ahead with its acquisition of the second largest retail firm in India, Future Group. The Competition Commission of India has approved the acquisition of Future Group’s retail, wholesale, logistics, and warehousing businesses by India’s largest retailer RRVL.
Commission approves acquisition of retail, wholesale, logistics & warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited pic.twitter.com/4WKdIrLHRP
— CCI (@CCI_India) November 20, 2020
This may come as a huge blow to the American e-commerce giant, Amazon, which has regularly opposed the proposed deal. The statement from CCI does give clarity over whether the deal is legitimate or not, however, it remains to be seen if the Singapore court’s order is legible or not.
Earlier this year in August, Reliance and Future had announced a deal that seeked to give the former a majority control of Future Group for $3.4 billion. This deal did not go well with Amazon, which has a 49% stake in Future Coupons, a holding company of Future Group. Amazon claimed that its contract with Future did not allow the Indian firm to make deals with any entities on a specific list, and that list, unsurprisingly, contained Mukesh Ambani led Reliance.
Later, the E-commerce giant reached out to a Singapore arbitration court and contested the deal between RRVL and Future Group there. The Singapore court ordered the two Indian firms to refrain from going ahead with the deal for a temporary period. But the companies (RRVL and Future Retail) were unconcerned by the order and said they were working to complete the deal “without any delay”. A lot of questions were raised about whether an order from a foreign court held any credibility in the Indian mainland.
Amazon had also requested CCI and SEBI to consider the order from Singapore International Arbitration Centre and halt the deal. But it seems as if all of its efforts went in vain. The dispute further went on to the Delhi High Court when Future Group requested the judiciary to grant Amazon a temporary injunction, preventing it from interfering in the proposed deal. Future Group has argued that its contract with Amazon is not valid in the deal with RRVL.