Mukesh Ambani’s firm issued the statement after Amazon won an emergency order from a Singapore arbitration court earlier on Sunday to temporarily halt the proposed sale between the two Indian retail giants.
Amazon’s deal with Future Retail had given the American e-commerce giant the first right to refusal on purchase of more stakes in Future Retail, the Indian firm had said at the time. Earlier local media reports have claimed that the agreement between Amazon and Future Retail also included a non-compete clause. The two companies entered an additional deal early this year that granted Amazon “long-term” rights to sell Future Group’s products online.
Amazon, Walmart’s Flipkart, and Ambani’s Reliance Industries, the most valuable firm in India, are locked in an intense battle to command the Indian retail market.
In a statement, an Amazon spokesperson said the company was “grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process.” The tribunal hearings are expected to commence in a few weeks.
Future Group, which has yet to comment on Amazon’s objection, entered the deal with Reliance Industries because the company could not continue to navigate through the losses the pandemic has caused to the business, its founder Kishore Biyani said at a virtual conference earlier this month.
At the moment, it is unclear whether today’s injunction is enforceable in India. Indeed, in a statement, a Reliance Industry spokesperson said that Reliance Retail’s transaction for acquisition of assets and business of Future Retail were conducted under “proper legal advice” and the “rights and obligations are fully enforceable under Indian law.”
Reliance Retail “intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay,” said the spokesperson for the retail giant, controlled by Ambani, India’s richest man (also pictured above).
Ambani’s other venture, Jio Platforms, this year raised over $20 billion from more than a dozen marquee investors, including Google and Facebook.
In the meantime, Walmart’s Flipkart on Thursday acquired a 7.8% stake in Aditya Birla Fashion, a fashion retail conglomerate that operates over 3,000 stores in India, for $203.8 million. Flipkart dominates in the online sales of apparels in India, thanks in part to Myntra, a fashion e-tailer it bought it in 2014. Over the years, the Walmart-owned firm has made several more investments in strengthening its fashion category. In July, it invested $35 million in Arvind Fashions, part of a decades-old Indian retail giant.