Amazon sends legal notice to Future Group over Reliance Deal. The legal notice is regarding the sale of a portion of its business to Reliance.
According to Amazon, Future Group has breached the contract made between them by selling a significant portion of their business to Reliance. In the month of August, Future Group announced that they are selling their retail and wholesale businesses. In addition to retail and wholesale, they also announced selling their logistics and warehousing businesses. The deal with Reliance Retail cost for about $3.4 billion.
Moreover, before this deal, Future Group had entered into a contract with Amazon, last year. Amazon bought 49% of the stake from Future Group. Furthermore, Amazon got a 3.58% stake in Future Group’s Retail business. According to this contract, no other firm can purchase stakes of the Future Group without the permission of Amazon.
Amazon legal notice to Future Group is all about the same. Hence, the deal between Reliance and Future Group cannot be signed without Amazon’s approval to it.
More about the deal:
In the month of August, Reliance announced that it will take over entire retail, wholesale, warehousing and logistic business of Future Group. Furthermore, the deal took place as a going concern basis and cost Rs. 24,713 crore. Moreover, after the deal, Future Group was left with its insurance ventures and consumer products. All the other business units were merging with Reliance Retail.
According to Amazon, it tried reaching out to Future Groups for talking things out but the communication did not take place. Future Group did not inform Amazon about this deal at all.
Hence, Amazon did not have any other option but taking legal steps against the company.
Read More:
Amazon sends notice to Future Group.
About Future Group:
Founded by Kishore Biyani, Future Group has a remarkable importance in Indian retail and fashion sector. It owns well-known outlets like Big Bazaar, Brand Factory, FBB, Food Bazaar, etc.