Reliance Industries (RIL) on Saturday announced the acquisition of retail chain Future Group for Rs 24,713 crore or $3.8 billion to strengthen to its retail business and bolster e-commerce to take on the competition from Amazon.com and Flipkart.
Reliance Retail Ventures, a subsidiary of RIL, will acquire the retail and wholesale business and the logistics and warehousing business from Future Group. Kishore Biyani is the founder of Future Group.
Hypermarket & Supermarket, lifestyle and consumer electronics are some of the components of the Future Group Retail business. Mukesh Ambani is the promoter of Reliance Industries.
RIL believes that Future Group’s portfolio composition in apparel, general merchandise and own FMCG brands will allow for a wider offering to its customers.
Isha Ambani, director of Reliance Retail Ventures, said: “We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands.”
The acquisition of the retail, wholesale and supply chain of Future Group complements and makes a strong strategic fit into Reliance’s retail business. Isha Ambani is the daughter of Mukesh Ambani.
This will help Reliance retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times.
Reliance Retail Ventures reported a consolidated turnover of Rs 1.62 lakh crore and net profit of Rs 5,448 crore for the year ended March 31, 2020.
Cash-rich Reliance recently attracted investments worth close to $20 billion from backers including Google and Facebook, while it sets out to make a big foray into India’s largely unorganised retail sector.
Reliance’s retail operation already runs close to 12,000 stores, including a cash-and-carry wholesale business, in over 6,700 Indian towns and cities.
In May, Reliance launched JioMart, an online grocery service in a move aimed at rivalling Amazon’s local unit and Walmart’s Flipkart in the huge Indian market. Ambani plans to list Reliance’s digital and retail units over the next five years.