Yesterday, Amazon sent a legal notice to Biyani’s Future group for breaching the terms of its contract by selling a significant portion of the business to Ambani’s Reliance Retail.
Last year, if one may recollect, Amazon had acquired a 49% stake in Future Coupons and through this deal, it got a 3.58% stake in Future Retail, gaining the first right of refusal to purchase more stake in Future Retail, both directly as well as via entities. So as per the deal signed, this was a non-compete agreement signed and it could not go ahead and sign a deal with anyone else without the approval from Amazon.
Those in the know say that this legal case comes out of the blue as Biyani had indeed first approached Amazon for the takeover of the Future Group companies and it was only after it said no that Biyani approached Reliance and inked the deal in August.
Reliance Retail signed a deal with Biyani to acquire the entire retail, wholesale, logistics and warehousing businesses of the Future Group as a going concern basis for Rs 24,713 crore.
This legal case now throws a spanner in the plans and the market is perturbed which explains why all the Future group stocks are down in the red today - Future Enterprises, Future Retail, Future Lifestyle and Future Consumer.