Future Group shares jump as Indian exchanges clear deal with Reliance

Future Consumer

21/01/2021 05:51

BENGALURU, Jan 21 (Reuters) - Shares in Future Group
companies jumped 5% on Thursday after Indian stock exchanges
approved the group's $3.4 billion deal to sell its retail assets
to Mukesh Ambani-led conglomerate Reliance Industries  RELI.NS .
    The approval takes Future, which operates supermarkets like
Big Bazaar and high-end food stores such as Foodhall in India, a
step closer towards sealing a deal that will create India's
groceries market leader. 
    The deal had soured ties with Future's business partner
Amazon.com Inc  AMZN.O , which alleged the transaction breached
agreements with Future made in 2019. Amazon raised legal and
regulatory challenges to the deal.  urn:newsml:reuters.com:*:nL4N2JV3M8
    Future Retail shares, which soared in August after the deal
was announced, ended 2020 around 77% lower on Amazon's
challenge.
    "The deal was more like a bail-out package for Future which
was deep in debt, so the clearance of this hurdle takes it a
step closer to relief on the financial side, while Reliance's
retail position stands to improve," said Ajit Mishra, vice
president, research at Religare Broking.
    The Indian exchanges said they reached the decision after
communicating with India's markets regulator, the Securities and
Exchange Board of India.
    Future Group founder and Chief Executive Kishore Biyani said
earlier this month the conglomerate expects swift regulatory
approval of the deal, after a New Delhi court last month left
the fate of the transaction with regulators.  urn:newsml:reuters.com:*:nL1N2JL03P
    "Thousands of jobs, payments to suppliers and customer
fulfillment happens when a company like Future Group is assured
of business continuity," said Kumar Rajagopalan, CEO, Retailers
Association of India.
    Future Retail shares rose 4.9% to a one-month high on
Thursday, while Reliance shares jumped 2.7% to its highest in
nearly three months, boosting the benchmark indexes  .NSEI 
 .BSESN .
    Reliance and Future did not immediately respond to Reuters
request for comment. Amazon said on Wednesday it would continue
to pursue legal remedies to enforce its rights. 

 (Reporting by Chris Thomas in Bengaluru; Editing by Arun
Koyyur)
 ((chris.thomas@thomsonreuters.com; +91-80-6749-8695;))