InvestorQ : What happens to the Amazon position now that the CCI has cleared the deal between Future Group and Reliance Retail?
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What happens to the Amazon position now that the CCI has cleared the deal between Future Group and Reliance Retail?

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Dawn Cherian answered.
5 months ago
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In what could be seen as a setback to the aggression of Amazon, the world’s most valuable company, the Competition Commission of India or CCI has approved the proposed merger deal between the Future Group and Reliance Retail Ventures.

It may be recollected that back in late August 2020, the Mukesh Ambani-led Reliance Industries had agreed to acquire the retail, wholesale and supply chain franchises of the troubled Future Group for Rs.24,713 crore. The idea was to build buffers around the Reliance retail plans to take on the competition from Amazon and Wal-Mart.

Under the deal, which can apparently proceed now, the retail and wholesale ventures of Future Group will be transferred to Reliance Retail on a slump basis to RRVL. The fashion business and the logistics and warehousing business will be directly handed over to RRVL. Future group had little choice after the stress created by COVID.

It may be recollected that Amazon had obtained an arbitration order from a Singapore Arbitrator restraining the deal and even SEBI, the exchanges and CCI had been intimated about the same. The fact that CCI has gone ahead with the approval shows that only court orders from international courts would be accepted.

Future group has consistently maintained even while deposing to the Delhi High Court that Amazon was not a shareholder and had little locus standi in the internal affairs of the Future group. Delhi High court has reserved its order on Future Retail’s plea seeking to restrain Amazon from approaching regulatory bodies against the deal with Reliance’s retail arm. The final order may come next week.

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