It’s a tough day for Amazon, as the Securities and Exchange Board of India (SEBI) has finally given its approval for the Reliance-Future Group deal. Now, the sale has been authorized by SEBI and CCI, which means that Amazon does not have a lot of options left apart from litigation.
After the authorization arrived, the Bombay Stock Exchange moved to grant its “no adverse observation” report to the deal, which means that it’s already almost official.
Reliance and Future Group entered an agreement last year, as a part of which, the former would buy up a majority stake in the second largest retailer in India. However, Amazon, which also has a stake in Future Group through its subsidiary Future Coupons(which it acquired in 2019), did not like the idea, and moved to get the deal dismissed.
It managed to get an injunction order from a Singapore court, asking both companies to put a hold on their merger. However, neither paid heed to the order, and said that they were going to go ahead with the deal anyway.
Then, the Competition Committee of India (CCI) also approved the deal. Thus, approvals from SEBI and the National Company Law Tribunal were the only thing left that stood between Reliance and FRL. With SEBI also giving its blessing to the merger, Amazon’s options have diminished even further, with the merger almost inevitable.
SEBI did say that Future Group would have to mention the Delhi High Court litigation it is facing before seeking shareholders or the approval from the National Company Law Tribunal approval, according to a BSE letter.
However, we don’t expect this to be a major hinderance for the Kishore Biyani led company. Amazon has always gotten the shorter end of the stick when it comes to the Reliance-Future Group deal, and has failed to register any major wins. The US e-commerce giant had asked SEBI to not approve the deal last week, but it looks like even those pleas have been rejected.