In 2020, Future Retail was running out of money. It had copious amounts of debts. Its stores weren’t doing all that well, employees were worried about losing jobs and lenders were convinced they weren’t getting their money back.

And then out of the blue, Reliance walked in as a White Night to acquire the company’s retail asset for about 25,000 Cr. It was lifesaver but, but…

But, Amazon blocked the move and challenge the deal.

In 2019, Amazon had inked a deal with Future Group, which owns Bigbazaar and other chain, in which they had taken up a 49% stake in Future Coupons, which in turn holds almost 10% stake in Future Group.

The Bone of Contention

The deal with Amazon had a clause that prohibited Future Group from selling their assets to certain “restricted person” including Reliance.

And with Amazon putting its full weight behind the blockade, the acquisition was never consummated for Reliance. This was a no-go they couldn’t play the waiting game, as their acquisition target (Future Group) shed value each day so they decided to do something drastic.

Since Future Retail was struggling to come good on all the lease payments for stores. Reliance offered to transfer the lease to its name.

Then they sublet the stores back to Future Retail so that they could continue operating them.

At this point Future Retail was obligated to make lease payment to Reliance and since they couldn’t replay the money Reliance simply began taking over the stores.

The mantra was to hollow out Future Retail by taking over one store at a time.

In fact, Reliance started removing Big Bazaar signage and rebranded it as its own.

Future Retail meanwhile simply stated that the company was scaling down operations to reduce losses without mentioning Reliance once. And as for Amazon, well they were so livid with the brazen move that there were going to file a criminal complaint.

Reports suggest that both Amazon and Reliance are finally willing to sit together and hash out their differences and a solution to be reached by 15th March, 2022.