In fight over Future Retail against Reliance Industries, Amazon comes up with a big no sale
In the end, Indian billionaire Mukesh Ambani settled the dispute over who gets to own the assets of beleaguered Future Retail Ltd. not in an arbitration tribunal in Singapore, or in a courtroom in New Delhi, but in a shopping aisle.
Future Retail had been subleasing store space from the tycoon’s Reliance Industries Ltd. Indeed, it was kept operating only on Ambani’s forbearance because Future couldn’t come up with the rent. But with Amazon.com continuing to block Reliance’s $3.4 billion purchase of Future’s assets, Ambani decided to make the acquisition a fait accompli: He terminated the leases and is taking control of the properties.
It was a dramatic denouement to a three-year-old saga. Amazon was Future’s original rescuer, investing $192 million into a gift voucher unit controlled by its founder Kishore Biyani so he could use the money to steady the debt-laden Indian retailer.
The condition of that 2019 deal was that assets — about 1,500 stores nationwide — wouldn’t be sold to Ambani, who owns India’s largest retail empire. When Biyani did exactly that after Covid-19 decimated operations, Amazon began proceedings against Future for breach of contract. The Reliance deal was in limbo — until Ambani decided he’d had enough.
The desperation was palpable in the messages Future sent Reliance. “Please confirm that there will not be any reduction in consideration payable,” said a March 2 missive from Future, as reported by Saritha Rai and P R Sanjai of Bloomberg News. Then, one paragraph later, “It is important for our stakeholders to have visibility on the final consideration.” Was Future Retail living under a rock? Its bailout by Ambani was always clearly a commercial deal, not a humanitarian mission. It was Future’s job to
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