Amazon-Future deal for a 9.5% stake-sale likely in 10 days, says report

Last Updated: Wed, Nov 28, 2018 11:18 hrs
FILE PHOTO - Jeff Bezos speaks about the future plans of Blue Origin in Washington

Amazon, the online retail behemoth is reported in advanced stages of talks with Kishore Biyani led Future Retail. On Tuesday, several reports confirmed the development.

According to a report published by PTI, Amazon headed by Jeff Bezos, the world's richest man, was eyeing a 9.5% stake in Future Retail. The deal is likely to be finalized in ten days. In the event of last-minute hurdles, the deal could be pushed to as late as January 2019.

Neither Amazon nor Future Group have confirmed the stories. Surprisingly, they have neither refused the speculative stories. Biyani had been reported of meeting Bezos at Amazon's headquarters in Atlanta, US. This was a few months after the Flipkart-Walmart deal for a 77% stake was confirmed.

The Amazon-Future Group deal has been estimated (according to reports) at Rs 2000 crores and will fall foreign portfolio investor (FPI) category.

A similar report in the E.T. said that there was a likelihood that Bezos could buy-out Biyani in a new deal. It is also speculated that the buying-out may be phased over a period of time. Amid unverified sources and anonymous officials, there is nothing to validate whether Amazon and Future Retail are actually signing the dotted line.

Future Retail has a presence in 250 cities across the country. As of September 2018, promoter and promoter group had 46.51% share of Future Retail Ltd, which operates hypermarket and supermarket under brands which include- Big Bazaar, Easyday, Foodhall, HyperCity, FBB, Heritage fresh, ezone and WH Smith.

If the deal goes through, this would be Amazon's third investment in India. The e-commerce major has existing stakes in Shoppers Stop and More.

Shoppers Stop had announced last year of raising Rs 179 crores from Amazon through an issue of equity shares on preferential basis. The deal with Investment Holdings LLC translated into just over 5% shareholding for Amazon in Shoppers Stop. In September this year, Amazon said it has co-invested in Witzig Advisory Services, the entity that is acquiring Aditya Birla Retail's 'More' chain of stores in India.

Besides offering Biyani's Future Retail abundant cash, the deal will also intensify competition between Amazon and Walmart-backed Flipkart.

Walmart, US' largest retailer picked up a 77% stake in Flipkart for $ 16 billion, the largest deal in the Indian e-commerce space so far, raising eyebrows. A deal of similar proportions is expected to add spice to Indian ecommerce market.