Mukesh Ambani owned Reliance has dismissed e-commerce giant, Amazon’s push to delay its acquisition of domestic retail major Future Group. This move has occurred, in spite of the arbitration panel suspending the deal post the objections raised by the US online firms.
This has been the latest development in a prolonged conflict for dominance in India that occurred between the Reliance and Amazon-owned by Asia’s richest man Mukesh Ambani and World’s wealthiest man Jeff Bezos respectively.
Amazon owns a stake in one of Future Group’s firms and it is reported that an option has also been included to buy into the flagship company. Furthermore, the company claims that the $3.4 billion Reliance deal had been announced in August and amounted to a breach of contract.
Post an arbitration and Amazon’s request the panel had ordered the deal to be put on hold. However, Reliance has announced, "enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay."
RRVL, a retail subsidiary had stated that it had followed proper legal advice before opting to purchase Future Group. The company further added that the deal was fully enforceable under Indian law. Thus, Reliance, Amazon, and Walmart owned Flipkart has been locked in a frenzied contest for a share of the country’s lucrative online market.
Amazon considers India as a key growth market where it has invested about $6.5 billion. It has already been bogged down by antitrust probes and strict foreign investment rules.
Furthermore, the acquisition of Future Group, which possesses some of the country’s best-known supermarket brands such as Big Bazaar, would strengthen Reliance's presence in the hugely competitive e-commerce sector. Hence, the arbitration panel has 90 days to give a final verdict on the Reliance-Future deal.
Murali Neelakantan, a corporate lawyer at Indian law firm Amicus says, "If Amazon doesn't get an injunction against the deal proceeding in India, they will probably just get damages even if they win the final arbitration."