Billionaire Mukesh Ambani’s Reliance Industries Limited, India’s largest retailer, announced that its unit Reliance Retail Ventures Limited (RRVL) has acquired Future Group, the number-two brick-and-mortar retailer in the market, for $3.4 billion.
WHO: Kishore Biyani, Future Group founder and CEO, started his entrepreneurial journey as a stonewashed-fabric seller in the 1980s. Future Group has 2,000 retail stores across the group’s Big Bazaar, FBB, Easyday, Central, Foodhall formats, covering over 24 million square feet of space in over 400 cities and towns. The portfolio composition is in apparel, general merchandise, and FMCG.
Founded in 2006, Reliance Retail, a subsidiary of Reliance Industries, has adopted a multi-prong strategy and operates a chain of neighborhood stores, supermarkets, wholesale cash & carry stores, specialty stores, and online stores, and has democratized access to a variety of products and services across diverse segments for Indian consumers.
WHY: The deal means Reliance Retail will command one-third of the brick-and-mortar stores of India’s modern retail sector and could help with its deep discounting strategy for JioMart, the e-commerce venture launched two months ago that competes with Amazon and Flipkart.
IN THEIR OWN WORDS: “With this transaction, we are pleased to provide a home to the renowned formats and brands of Future Group as well as preserve its business ecosystem, which have played an important role in the evolution of modern retail in India,” said Ambani’s daughter Isha, who serves as a director at Reliance Retail, in a statement.
“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. We are committed to continue providing value to our consumers across the country,” she added.
The acquisition complements and makes a strong strategic fit into Reliance’s retail business, the Reliance Retail Ventures release said. “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.”
“As a result of this reorganization and transaction, Future Group will achieve a holistic solution to the challenges that have been caused by COVID and the macroeconomic environment. This transaction takes into account the interest of all its stakeholders including lenders, shareholders, creditors, suppliers, and employees, giving continuity to all its businesses,” said Kishore Biyani, Group CEO, Future Group.
“We are pleased that our strong retail franchise and brands, that we have created over time, are going in stronger hands and will continue to grow and delight Indian shoppers,” added Biyani.
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