Future Group and Mukesh Ambani-led Reliance Industries deal are in discussions for the last few months. There are few reasons for this deal’s popularity. First, It is one of the biggest deals in the industry. Second, it was opposed by retail giant Amazon Inc.
Finally, SEBI(Securities and Exchange Board of India) approved the Future Group-Reliance Industries merger on Wednesday.
About the Current Deal
This deal emerged in August 2020. As per the deal, Reliance will acquire Future Group’s retail, warehouse, wholesale, logistics business. The deal was finalized with a whopping amount of Rs 24713 crore.
Amazon being one of the shareholders in Future Group, sent a new letter on 14 January including earlier 8 letters to concerned authorities about disapproving the deal. Amazon informed the regulatory authorities that the matter is not cleared in the High Court of Delhi yet.
Company shall ensure that the shares of the transferee entity issued in lieu of the locked-in shares of the transferor entities are subjected to lock-in for the remaining period post scheme,” Sebi stated.
“Company shall ensure that proceedings pending before SEBI against the entities part of the promoter/promoter group or are directors of the companies involved in the scheme, should be highlighted in the scheme document filed before National Company Law Tribunal (NCLT),” it further added.
Though Approval is done by SEBI but with a lot of conditions. Authorities did not ignore the issues raised by Amazon.
Sebi clearly stated that Future group and Reliance industries will keep the existing shareholders informed about the operations. Any dispute should be well sorted among stakeholders.
“Any future dispute, complaints, proceedings related to the current deal will be brought to the shareholders’ knowledge first. After an agreement from shareholders, it should come up for NCLT approval.” SEBI added.
“In light of the above, we hereby advise that we have no adverse observations with limited reference to those matters having a bearing on listing/de-listing/continuous listing requirements within the provisions of Listing Agreement, so as to enable the company to file the scheme with Hon’ble NCLT,” Sebi added.
Dispute Between Amazon and Future Group
On December 21, Amazon filed a case against the deal in Delhi High Court. Amazon requested the court to put the current deal on hold.
Amazon-Future Group dispute is going on for the last few months. Recently, Future Group blamed Amazon for not helping the company as per the agreements.
On the other side, Amazon told Sebi that Future Group and Amazon have some pact. As per the signed deal between Amazon and the future group, the current deal is violating some clause of it.
Future Group CEO criticized Amazon a lot. He told that the company pleaded for help 8 times but Amazon did not provide any aid.
“They could have contributed some funds through financial institutions. They never did despite the agreement clause and request.” He further added.
Future group is calling Reliance a Saviour. As per the Future Group CEO statement, all stakeholders, shareholders, employees are happy with this deal.
The blame game between Amazon and Future Group is not stopping at all. Reliance says that the deal is as per the legal laws. It will be interesting to see how Reliance Industries will handle the current dispute between these two heavyweights.