The Indian watchdog said on Friday it has approved the $3.4 billion deal between the nation’s two largest retail giants, Future Group and Reliance Retail, posing a new headache for American e-commerce group Amazon in the key overseas market.
The Competition Commission of India (CCI) said in a brief statement that it had approved the proposed acquisition of retail, wholesale, logistics, and warehousing businesses of Future Group, India’s second largest retail chain, by Reliance Retail, the largest.
Reliance Retail and Future Group announced their proposed deal, worth $3.4 billion, in late August. Amazon, which owns a stake in a Future Group’s subsidiary, has protested the deal, alleging the Indian firm of engaging in insider trading and violating contracts.
Late last month, a Singapore arbitration court issued an order to temporarily halt the deal between the two Indian retail giants, but it has been unclear ever since how much weight that order holds in India. Shortly after the court issued the order, Future Group and Reliance Retail said they were working to complete their deal “without any delay.”
Friday’s announcement is crucial. Amazon, which has invested over $6.5 billion in its India business, had requested the CCI and SEBI, the regulator of the securities and commodity market in India, to consider Singapore International Arbitration Centre’s order and blocking the deal.
Future Group is currently fighting with Amazon in a court in Delhi, where a lawyer of the Indian firm has used bizarre language to charge Amazon. The lawyer has likened Amazon’s effort to block Future Group’s deal to the East India Company.
More to follow…