According to the latest report, Amazon and India’s Future Group told India’s Supreme Court today that the two sides failed to reach an agreement on the ” Future Group’s sale of retail assets transaction ” negotiations.
For more than a year, Amazon and Future Group have been locked in a complicated legal standoff that has stalled the sale of Future Group’s $3.4 billion retail assets to Amazon’s rival Reliance Industries, with no end in sight.
Earlier this month, Amazon and Future Group agreed to hold talks on the issue, hoping to reach an out-of-court settlement. At a Supreme Court hearing, Future Group’s lawyers agreed to an out-of-court settlement proposed by Amazon’s lawyers, and Reliance Industries also participated in the negotiations.
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But today, the companies told India’s Supreme Court that negotiations between the two sides had failed. According to people familiar with the matter, the reason for the breakdown of the negotiations is that Amazon hopes that the future group will return at least 200 million US dollars of funds, which is also the number of funds that Amazon has put into the future group. But Future Group said the company’s current financial situation would not allow them to do so.
Earlier today, Amazon ran a newspaper ad accusing Future Group of playing a fraudulent game in front of an Indian court by secretly moving retail stores. Reliance Industries has yet to comment, while Mirae Group has denied any wrongdoing.
The dispute between the two companies originated in 2019. At the time, Amazon invested $200 million in Future Coupons, a unit of Future Group, for a 49 percent stake. Future Group is the second-largest retail chain in India aftermarket leader Reliance Industries.
Moreover, Amazon said the deal came with certain “non-compete clauses” that bar Future Group from selling retail assets to certain rivals, including Reliance Industries, which is owned by India’s richest man Mukesh Ambani.
But in 2020, affected by the new crown pneumonia epidemic, Future Group decided to sell its retail assets to Reliance Industries, but the plan was opposed by Amazon. Today, the two companies sue each other in Indian courts, including the Supreme Court.
Furthermore, Amazon said various agreements it signed with Mirae Group in 2019 gave it special rights over Mirae Group’s retail assets. Mirae Group denies any wrongdoing, saying Amazon is unlawfully seeking to exert control over Future Group’s retail operations.
Currently, India has about 1.3 billion consumers, and the retail market size is as high as 900 billion US dollars (about 5.74 trillion yuan). And this dispute will be related to whether Amazon can become a more powerful force than Reliance Industries in this extremely important market.
Reliance Industries operates 1,100 supermarkets, while Mirae Group owns more than 1,500 supermarkets. Both companies are rapidly expanding into e-commerce, and the Future Group deal, which sells the retail business to Reliance Industries, will give an immediate boost to Reliance Industries’ retail business, which has already attracted a slew of foreign investors into the business.
In the case of Amazon, the company has invested $6.5 billion in India and sees India as a key growth market, and Amazon is also a leading e-commerce player. The partnership with Future Group allows Amazon to boost its online grocery delivery capabilities by integrating the Indian company’s stores on its website.
