The deal is good news for lenders of Future Group who will now have secured outstanding loans protected as well as the retail ecosystem comprising small businesses and suppliers.
Reliance Industries Limited (RIL) on August 29 said it would
buy retail and wholesale business, as well as the logistics and
warehousing business of the Future Group, for Rs 24,713 crore. The
acquisition is being done as part of the scheme in which Future Group is
merging certain companies carrying on the above-mentioned businesses
into Future Enterprises Limited (FEL).
Here
are the key takeaways from the deal:
1.
This deal
cements the position of Reliance Retail as the undisputed leader in the
organised retail segment and adds muscle to the ongoing battle with Amazon for
the Indian e-commerce market.
2. The deal is good news for lenders of Future
Group who will now have secured outstanding loans protected as well as the
retail ecosystem comprising small businesses and suppliers.
3. Reliance Retail, which was already the largest
retailer in India by a long shot, gets even larger and bigger. Its network
gets a big push in the cities, where 40 percent of Future stores are
present.
4. The deal will help RIL’s retail business to
expand its offline retail presence and get it ready to tap into
Operator-to-Operator (O2O) as well as Business-to-Business (B2B) opportunities.
5. The Future Group houses leading retail formats,
including supermarket chain Big Bazaar, upmarket food stores Foodhall, and
bargain clothing chain Brand Factory. This gives them an edge into all these
areas of business.
6. Biyani’s exit from a business he had
painstakingly built over three decades was forced by a rising pile of debt and
the searing pain wrought by the COVID-19 pandemic. This deal prevented the
collapse of a vast retail group that would have otherwise been dragged through
India’s bankruptcy court.
Comments
Post a Comment