Reliance Retail Ventures (RRVL), subsidiary of Reliance Industries, has announced the acquisition of retail and wholesale business and the logistics & warehousing business from Future Group as going concerns on a slump sale basis for lumpsum aggregate consideration of Rs 24,713 crore, subject to adjustments as set-out in the composite scheme of arrangement (scheme).
The above acquisition is being done as part of the scheme in which Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises (FEL).
As part of the same scheme, the retail and wholesale undertaking is being transferred to Reliance Retail and Fashion Lifestyle (RRFLL), a wholly-owned subsidiary of RRVL and the logistics and warehousing undertaking is being transferred to RRVL.
RRFLL also proposes to invest Rs 1,200 crore in the preferential issue of equity shares of FEL to acquire 6.09 percent of post-merger equity, and Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75 percent of the issue price, will result in RRFLL acquiring further 7.05 percent of FEL.
The acquisition of the retail, wholesale and supply chain business of Future Group makes a strong strategic fit into Reliance’s retail business. This will help Reliance retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income.
Future Group’s portfolio composition in apparel, general merchandise and own FMCG brands will allow for a wider offering to its customers.
The acquisition is subject to SEBI, CCI, NCLT, shareholders, creditors and other requisite approvals.
RRVL is a subsidiary of Reliance Industries, carrying on the consumer supply chain business and consumer retail business through its subsidiaries. The company reported a consolidated turnover of Rs 1,62,936 crore and net profit of Rs 5,448 crore in FY20.