Amazon in advance to acquire a stake in Future Retail

NEW DELHI: The online retailer Amazon is at an advanced stage of negotiations to acquire about 9.5% of Future Retail's share capital led by Kishore Biyani, sources said.

An agreement between the two parties should be finalized within 10 days, the sources said, although the agreement could be announced in January 2019 in case of last-minute obstacles .

When contacted, Amazon declined to comment. The messages sent to the founder of the Future Group group, Kishore Biyani, remained unanswered when the article was submitted.

According to a press article, the contract between Amazon and the future group is initially estimated at around 2,000 crores of rupees executed as part of a foreign portfolio investor (FPI).

The agreement could also include Amazon buy back Biyani and the entire portfolio of promoters group in the future, subject to the regulations in force in India.

In September 2018, the promoter and the promoter group held a 46.51% stake in Future Retail Ltd, which operates hypermarkets and supermarkets under brands such as Big Bazaar, Easyday, Foodhall, HyperCity, FBB, Heritage Fresh, Ezone and WH Smith. .

It is present in 250 cities of the country.

Amazon, the leading e-commerce player who wants to strengthen its presence in India, has already taken a stake in Shoppers Stop and More.

If the agreement was reached, it would be the third investment of the American company in the retail ecosystem in India.

Last year, the Shoppers Stop department store announced it had collected 179.26 crores of Amazon rupees through an issuance of shares on a preferential basis. The agreement with Amazon.com Investment Holdings LLC has resulted in a stake of just over 5% for Amazon in Shoppers Stop.

In September of this year, Amazon announced that it has co-invested in Witzig Advisory Services, the entity that is acquiring the "more" chain of Aditya Birla Retail stores in India. .

According to market observers, this agreement should help Amazon strengthen its presence in India's retail market, which is still dominated by offline retailers.

This decision would also intensify competition between Flipkart, backed by Walmart, and who are engaged in an intense battle for leadership in the Indian e-commerce market.

Walmart, the largest US retailer, had taken a 77 percent stake in Flipkart for $ 16 billion, the largest transaction ever made in e-commerce in India.

Amazon and Flipkart are injecting millions of dollars into building infrastructure and expanding business in the country.