Mukesh Ambani's RIL Likely To Buy Future Group's Retail Business Including Big Bazaar For Rs 27,000 Crore

Mukesh Ambani's Reliance Industries Limited (RIL) is likely to finalise a deal with Future Group, purchasing its retail assets for an estimated amount of Rs 24,000-27,000 crore, Livemint has reported citing people familiar with the deal.

The deal, which is aimed at strengthening RIL's grip over Indian retail market, is reportedly also going to include Future Group's liabilities being absorbed by Reliance.

Sources cited in the report also told that five entities of the group -- Future Retail Ltd, Future Consumer, Future Lifestyle Fashions, Future Supply Chain and Future Market Networks -- will be merged into Future Enterprises Ltd (FEL) before the deal.

Once done, Future groups retail assets will be sold to one of RIL's retail subsidiaries.

Reliance Industries will acquire Future Group's retail entities such as Big Bazaar, FoodHall, Nilgiris, FBB, Central, Heritage Foods and Brand Factory, which have more than 1,700 stores in total across India. The deal, however, does not include Future Group's clothing brands such as Lee Cooper.

Once the deal is closed, RIL will also absorb Future Group's partnerships with foreign brands and retailers for supply and other purposes.

As per the sources cited by Livemint, negotiations are currently underway and could take some time to reach a conclusion.

After the reports came out about the said deal, Mukesh Ambani-led giant's shares grew which increased RIL's m-cap to Rs 14.58 lakh crore. Future Retail Ltd's shares also surged on Monday by about 5 per cent, as per a report in ET Now.

Future Group, founded by businessman Kishore Biyani, has made a mark for itself in India's retail market since it entered the business in 1980s. The first store of popular super-market chain Big Bazaar was opened in 2001, which has ever since spread in several small and large cities across the country.

The company, however, has been under big debts for some years and the upcoming reported deal is said to be an attempt to lower the loans.

As per the report, Future Group had a total debt of Rs 12,778 crore on its companies as of 30 September 2019 and it has been growing at a rapid rate.

Reliance Group's entities such as Reliance Trends, Reliance Fresh, Reliance Footprint, Reliance Digital also have a strong presence in the retail sector in the country and have been considered a competitor of Future Group's. However, with the reported deal, RIL is expected to grow its market share many folds.