SC halts Future Group's Reliance deal on Amazon plea, RIL shares down 2%
The Supreme Court has stopped regulatory approval for the Future Group’s $3.4 bn asset sale to Reliance Industries, effectively halting the deal and marking another victory for Amazon, which wants to scuttle the transaction in its bid to dominate the country’s retail sector.
Agreeing with the American e-commerce giant’s petition, the top court recently overturned a lower court’s ruling and stopped India’s company tribunal from approving the transaction till further orders. The court issued notices to Future Retail Ltd. seeking written statements on Amazon’s petition. Reliance Industries shares were down 2% at Rs2035 while Future Retail fell 2.6% to Rs74.15 in noon trade.
If Reliance’s purchase is allowed to proceed, it would give its retail arm access to over 1,800 stores in more than 420 cities in India, as well as Future Group’s wholesale business and logistics arm. Reliance is a player which has the money, which has the influence which is required in this market. They don’t have the expertise to do e-commerce.If Amazon succeeds, it may gain the upper hand, slowing a key competitor’s plans to push into e-commerce.