Reliance in talks to buy retail arm of Future Group

In order to bolster its position in the retail market of India, Reliance Industries Ltd. is planning to buy Kishore Biyani’s Future Group’s retail assets, according to a report release by Mint media.

RIL is ready to offer Rs. 24,000-27,000 crore (US $ 3.2-3.6 billion) for the deal.

For the sale of assets, five listed entities in Future Group’s retail arm, Future Retail Ltd., Future Consumer, Suture Supply Chain, Future Lifestyle Fashions and Future Market Networks, will be merged into Future Enterprises Ltd. (FEL).

Reportedly, the deal value will include the liabilities RIL plans to absorb. However, both giants are still negotiating.

RIL will also absorb partnerships that the Future Group has with foreign brands and retailers.

The deal comes as the debt of Future Group has been steadily rising. According to ratings agency ICRA, as of September 30 2019, Future Group had accumulated a debt of Rs. 12,778 crore, up from Rs. 10,951 crore as of March 2019.

While there is still some speculation around the deal, Reliance is said to have exclusivity on the deal till 31 July. The Mukesh Ambani-led conglomerate which operates close to 12,000 retail stores in India has been receiving worldwide acclamation with close to US $ 20 million invested by Google and Facebook.