Amazon Inc has sent a legal notice to India’s second-largest retail chain, Future Group for breaching the terms of its contract, over the retailer’s deal with Reliance Industries where it has sold a significant part of the business to Ambani’s Reliance Retail. In August, Future Group announced that the Mukesh Ambani-led Reliance Industries said it would acquire the retail and wholesale business as well as the logistics and warehousing business in a deal valued at $3.38 billion, including debt and thus Future Group has to sell this all to Reliance Retail. However, before this picture, Amazon and Future Group also had a deal.
More About Legal Lawsuit By Amazon :
Last year, Amazon has taken a 49% stake in Future Coupons, which is the group entity of the retail business of Future Group, which gave amazon a 3.8% stake in Future retail. This deal also gave Amazon the right to the first refusal to purchase directly or via entities, more stake in Future Group. Amazon’s investment in Future Group with contractual rights as mentioned above includes a right of first refusal and a non-compete-like pact. Reports are saying this was the primary reason why the Amazon has sent a legal notice to Future Coupons.
According to the report, in its legal notice, Amazon cited a contract arrangement that had “a restricted list” of companies. The Future had no right to make the deal. The legal notice is sent to a promoter of Future Group by Amazon Inc. Also, a lot of retailers with Reliance Industries are there too. It has confused many in India because according to continuous told by reports that Amazon is going to acquire more than billions of dollars stake in Reliance Retail. Also, Reliance Retail is India’s largest retail chain.
The company had not immediately responded to the requests for commenting on the matter. The previous year, Amazon put up a 49 percent stake in Future Coupons. This owns a 7.3 percent interest in the retail group that operates more than 1,500 stores in India. These stores operate in more than 400 cities including the grocery chain Big Bazaar. Amazon has recently confirmed that it certainly had filed a legal notice against Future Group. But, did not brief anything as the matter is “sub judice”. Both Reliance Retail and Future Group commented nothing on this matter.
Till Wednesday midnight, Future Group had not revealed the notice on this stock exchange matter. So, it will indeed be interesting to see how the clash of these corporate superpower turns out.