India's Reliance to pay up to $3.6 bln for Future Group retail ops - Mint (updated)

Future Lifestyle Fashions

28/07/2020 10:20

* Reliance raised $20 bln in recent months from backers
including
Google, Facebook
    * Deal includes five listed entities, including Future
Retail Ltd
    * Future owns Big Bazaar, Brand Factory, Foodhall chains 
    * Price includes Future Group debt

 (Updates with Future Retail's response)
    BENGALURU, July 28 (Reuters) - Mukesh Ambani's Reliance
Industries Ltd  RELI.NS  will pay between 240 billion and 270
billion rupees ($3.2-$3.6 billion) to buy the Indian retail
chains owned by Future Group, Mint newspaper reported on
Tuesday, citing two sources familiar with details of the deal.
    Asia's richest man, Ambani has been buoyed by investments
close to $20 billion from backers including Google  GOOGL.O  and
Facebook  FB.O  in his oil-to-telecoms conglomerate, and is
seeking to strengthen his hand in India's huge retail sector. 
    Reliance's existing retail operation already runs close to
12,000 stores, including a cash-and-carry wholesale business, in
over 6,700 Indian towns and cities.
    Owned by India's "father of modern retailing", Kishore
Biyani, Future Group is home to supermarket chain Big Bazaar,
upmarket food stores Foodhall, and bargain clothing chain Brand
Factory.
    A series of media reports have said the two were nearing
agreement on the deal.  urn:newsml:reuters.com:*:nL3N2EY15F
    Ratings agency ICRA estimates https://www.icra.in/Rationale/ShowRationaleReport?Id=95108
 total debt at Future Group's listed companies had risen to
127.78 billion rupees by September last year and the company has
since faced widespread closures under India's coronavirus
lockdowns. 
    Mint cited its sources, speaking on condition of anonymity,
as saying the sale value included Future Group's liabilities.
    Five listed entities, including Future Retail Ltd  FRTL.NS ,
will be merged into Future Enterprises Ltd (FEL) before the sale
to one of the retail subsidiaries of Reliance, the paper added.
    In May, Reliance launched JioMart, an online grocery service
in a move aimed at rivaling Amazon.com's  AMZN.O  local unit and
Walmart Inc's  WMT.N  Flipkart in the huge Indian market. Ambani
plans to list Reliance's digital and retail units over the next
five years.  urn:newsml:reuters.com:*:nL4N2DW11H
    In its response to the Mint report, Future Retail said its
board had not taken any decision that required disclosures to
the stock exchanges. A Reliance Industries spokesperson said the
company evaluates various opportunities on an ongoing basis.
 urn:newsml:reuters.com:*:nFWN2EY1IR
    
($1 = 74.7900 Indian rupees)

 (Reporting by Philip George in Bengaluru; editing by Patrick
Graham, Vinay Dwivedi and Uttaresh.V)
 ((P.George@thomsonreuters.com; +91 8061822657; Reuters
Messaging: p.george@thomsonreuters.net))