Indian retailer Reliance has nixed its $3.4 billion deal with Mumbai-based retail firm Future Group, adding it “cannot be implemented” because Future’s secured creditors rejected the agreement, Reuters reported Saturday (April 23).
The scuttled deal has been part of a legal skirmish since 2020, when Future partner Amazon blocked the proposal and said it violated certain contracts between the two companies. Future denied any wrongdoing in the situation.
In a stock exchange filing Saturday, Reliance said the deal is off because “the secured creditors of FRL (Future Retail) have voted against” it, according to the report.
Future’s secured lenders shot down the proposal Friday (April 22), putting Future Retail on the verge of bankruptcy after it had grown to more than 1,500 stores at its peak, making it India’s second-largest retail firm, the report stated.
Neither Future Retail nor Amazon responded to Reuters’ request for comment on the situation, according to the report.
Amazon has been fighting against Future’s proposed move to the Reliance umbrella since it first surfaced about two years ago, securing legal injunctions to stall the collaboration and fighting for its position in courtrooms around the world, including an arbitration panel in Singapore.
Reliance took control of hundreds of Future stores in February, saying the tenant wasn’t paying its rent after it assumed many of its leases.
In 2019, Amazon purchased a 49% stake in Future Coupons, the parent company of Future Retail. At the time, an Amazon spokesperson said the investment would enhance Amazon’s portfolio of investments in India. Later that year, the Competition Commission of India (CCI) suspended the deal. The agency ruled Amazon had suppressed information while seeking approvals for the agreement.
Read more: Amazon Says Out-of-Court Settlement With Future Retail Is Impossible
Future argued that since the deal with Amazon isn’t backed by the CCI, it has “no legal existence” in India, and Amazon can’t use it to defend its stance. In 2020, Amazon objected to Reliance Retail’s offer to buy Future’s stores and warehouses for 247 billion rupees ($3.2 billion), alleging the deal violated its 2019 agreement with Future.
Amazon had sought an out-of-court settlement and asked a judge to resume arbitration with Future and order the company to halt a transfer of assets to Reliance.
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