Shock to Mukesh Ambani from Supreme Court, ban on Reliance-Future deal, Amazon has objection

Shock to Mukesh Ambani from Supreme Court, ban on Reliance-Future deal, Amazon has objection

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Shock to Reliance Retail from Supreme Court.&nbsp | &nbspPhoto Credits:&nbspPTI

Headlines

  • Based on the decision of the Singapore International Arbitration Center, the Supreme Court stayed
  • In August 2020, Reliance Retail had signed an agreement to buy Future Retail for Rs 24713 crore.
  • Amazon and Reliance are racing to capture India’s retail business

New Delhi: The Supreme Court has stayed the August 2020 deal between Reliance and Future Group (Big Bazaar brand). Under this deal, Mukesh Ambani’s Reliance Group had announced to buy Kishore Biyani’s Future Retail for Rs 24713 crore ($ 3.4 billion). Against which Amazon, an e-commerce company already investing in Future Group’s company, had gone to the Supreme Court. Hearing on Amazon’s petition, today the Supreme Court has put a stay on the deal for the time being. The Supreme Court has said that the Singapore International Arbitrator Center’s decision to stop the sale of Future Retail can be implemented. In such a situation, that decision will be applicable in India also. This decision has put a brake on Mukesh Ambani’s plan to reduce Amazon’s dominance in the retail sector for the time being.

In fact, the world’s largest e-commerce company Amazon had gone to court in Singapore against the deal between Reliance Retail and Future Retail. Where on 25 October 2020, the court had stayed the deal. Since this ban was imposed by the Singapore Court. In such a situation, that decision could not be implemented in India. After this the matter reached the Delhi High Court and the Supreme Court.

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What is Mukesh Ambani’s plan

Basically the fight is to capture the Indian retail market. In which there is a direct competition between Mukesh Ambani’s Reliance Retail and Jeff Bezos’s Amazon company. Both the companies are looking to take advantage of its 400-city infrastructure by buying out the debt-ridden Future Group’s retail business. In view of this, there was an agreement between Mukesh Ambani’s Reliance Retail and Future Group’s Kishore Biyani to buy Future Retail. If this deal is approved, then Mukesh Ambani will get a chance to break Amazon’s dominance in the online retail market.
Currently, Amazon has a 33 percent share in the Indian online market. The Future Group has over 1400 retail outlets.

Related news

Reliance-Future agreed, then why the decision in favor of Amazon

Actually, the deal between Amazon and Future Group in August 2019 is a big reason behind this. At that time, Amazon had bought a 49 percent stake in Future Coupons, a Future Group company. The deal was finalized for Rs 1431 crore. Importantly, Future Coupons holds a 9.8 per cent stake in Future Retail. Apart from this, it was agreed in the 2019 deal that within the next 3-10 years, Amazon would be entitled to buy a stake in Future Retail. Amazon’s side regarding this agreement seems to be overshadowed in the eyes of the courts.

$99 billion e-retail business

Actually the way online shopping is increasing in India. Given this, it is expected to turn into a $99 billion market by 2024. In view of this, the race has started between Amazon and Reliance. Both companies are looking to take the lead in the race through the built-in infrastructure of the Future Group.

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