Reliance acquires Future Group Retail for US$3.4bn

Reliance Industries Limited has taken steps to increase its retail presence in the market with an announcement of its subsidiary, Reliance Retail Ventures Limited (RRVL), acquiring the Retail & Wholesale and the Logistics & Warehousing businesses from the Future Group for a total value of US$3.4 billion.

August 29, 2020

The deal will see RRVL acquire the logistics and warehousing businesses from the Future Group

RRVL subsidiary, Reliance Retail and Fashion Lifestyle Limited (RRFLL), will acquire the retail and wholesale businesses transferred

RRFLL intends to invest an additional US$218 million to acquire 13.14 per cent of Future Enterprises Ltd

Reliance has widened its offering to retail consumers in India through brands within the Future Group portfolio

Reliance Industries Limited has taken steps to increase its retail presence in the market with an announcement of its subsidiary, Reliance Retail Ventures Limited (RRVL), acquiring the Retail & Wholesale and the Logistics & Warehousing businesses from the Future Group for a total value of US$3.4 billion. According to an official release from the company on August 29, the acquisition is a part of the steps taken by the Future Group to ensure a successful merger of different businesses within its own Future Enterprises Limited (FEL). The deal will see the logistics and warehousing businesses being acquired by RRVL, while the retail and wholesale businesses are transferred to its subsidiary, Reliance Retail and Fashion Lifestyle Limited (RRFLL). Additionally, RRFLL intends to invest US$163 million and US$55 million respectively to acquire 13.14 per cent of FEL following the new mergers.

Speaking on the acquisition, RRVL Director, Ms. Isha Ambani outlined plans to preserve the business ecosystem built by the Future Group, while supporting the growth of modern retail in India. With a consumer-centric approach, retail entities such as RRVL and FEL will create value for all stakeholders with a collaborative model that connects both large and small brands with customers nationwide. In addition, the acquisition will ensure a wider offering to retail consumers in India as Reliance amplifies the reach of brands within the Future Group portfolio.

The Indian government aims to provide significant support to domestic and international investors by creating an investment-friendly ecosystem within the country. As the COVID-19 crisis continues to disrupt global production channels in Asia, India is taking steps to incentivise investment from foreign firms with strategies to attract FDI from companies facing challenges in other global markets. Locally, the Department for Promotion of Industry and Internal Trade (DPIIT) is working towards establishing an integrated approach between various ministries and the Central and State governments to create incentive policies for investment. In addition to making India more investor-friendly, these decisions showcase how its economy is recovering and adapting to 2020 market conditions.