Finally, online retailing giant Amazon wins. In the latest order, Supreme Court has ordered to halt the controversial Reliance-Future Group deal. The current decision will help Amazon in its ambitious plan to dominate the $1 trillion retail industry.
SC Halts Reliance-Future Group Deal
In the latest order, the Supreme Court(SC) of India has given a big boost to Amazon’s plans by stopping the controversial and one of the largest business deals between Reliance and Future Group. While announcing the verdict, top court Justice Rohinton F. Nariman ruled that the order of Singapore emergency arbitrator that halted the $3.4 billion deal is enforceable in India.
From the last few months, an intense business war was on between Jeff Bezos’ Amazon and Ambani’s Reliance Industries. Ambani signed a deal with Future Group to acquire its all businesses and operation for a whopping $3.4 billion. But, as per an earlier contract with Amazon, Future Group requires a no-objection certificate from Amazon before signing any such deal. That is how the court drama started between Amazon and Future Group.
Reliance Industries was continuously claiming that it has followed all the terms and conditions to acquire Future Group. While Amazon knocked the doors of legal authorities against the illegal nature of the Reliance-Future Group deal. The verdict is the end of the local chapter of a bitter battle between Jeff Bezos-founded Amazon and India’s second-largest supermarket chain that Mukesh Ambani’s Reliance Industries wants to acquire.
Since the court gave the judgment in favor of the Singapore Arbitration Court of Singapore. So, Reliance Industries and Future Retail have to fight the case further in Singapore court only.
Indian Retail Market Competition is Heating Up
The Indian retail market is growing exponentially. And the big giants like Amazon, Reliance Retail, Flipkart, and Tata Group are competing against each other to establish themselves as the market leader.
In the 44th annual general meeting(AGM), Reliance announced that it plans to grow the retail business by 3x In the next 3 to 5 years. And, the firm wants to collaborate with over 1 crore merchant partners in the next three years.
While Amazon has pledged a $6.5 billion investment in the market. Wallmart owned Flipkart has also raised over $3.6 billion to reach a valuation of nearly $38 billion.
The current verdict is a big setback for Reliance Retail. It has already gone in the right direction in terms of e-commerce business, but the retail giant was heavily dependant on offline stores of Future Retail to become the largest retailer in India.
Amazon, the global retail giant, will take the current court decision as a strategic victory in the retail business ecosystem against its main rival Reliance. Tata Digital is also very active to establish itself in the digital consumer market. The Indian business giant has already acquired few startups including BigBasket, 1mg, Soulfull makers, and other to launch its dream project Tata Super App.
in April 2021, due to all these unwanted developments, Reliance extended the timeline for a long stop for the Future Group deal by another six months. As per the long stop concept, if the deal doesn’t get clear within this time frame, Reliance has a right to withdraw from the deal. In such a scenario when deal terms and conditions are not fulfilled in the coming 6 months, Future Group has to pay all the transaction amount to Reliance Retail Ventures.