Mukesh Ambani’s planned purchase of a retailer with $3.4 billion in debt was dealt a blow after Amazon.com Inc. won a lawsuit to halt the transaction, disrupting the tycoon’s ambitions to beat the US e-commerce giant in the $1 trillion local market.
On Friday, a two-judge bench of the Supreme Court ruled that an emergency order from an arbitrator from Singapore last year, which prevented Reliance from going through with the deal, is legally binding. Amazon had applied to the arbitration court and the parties will now have to await the deliberation of that body before making a final decision.
The court’s ruling is the latest installment in a bitter battle over money-starved Future Retail Ltd. — the country’s second-largest supermarket chain — which includes both Jeff Bezos-founded Amazon and Mr. Ambani’s Reliance Industries Ltd. want to check. Owned by two of the world’s richest men, the two behemoths are fighting for a larger share of the only multibillion-plus consumer market still open to foreign companies.
Dependency fell by a whopping 2.6% in Mumbai on the ruling, the biggest intraday drop in two weeks. Future Retail fell from its daily limit of 10%, the most in more than four months.
For Seattle-based Amazon, adding Future’s Big Bazaar stores to its assets would help expand its physical footprint across the country. Mr Ambani announced his plans to buy Future’s assets almost a year ago to support his retail push. Its oil refining conglomerate has identified e-commerce and conventional retail as two areas of focus, attracting investors in 2020, including Facebook Inc. and Alphabet Inc.’s Google.
“The court’s verdict puts a brake on Reliance’s dominance in retail in India,” said Devangshu Dutta, founder and chief executive officer of Delhi-based retail consultancy Third Eyesight. “It balances competition with the larger US players and gives Amazon a much-needed presence in the brick-and-mortar retail space.”
Future Retail’s 5.60% $500 million notes from January 2025 fell 5.7 cents on the dollar to 66.3 as of 2:45 p.m. in Hong Kong. That’s the lowest level since Aug. 27, according to data collected by Bloomberg
The feud highlights the importance of the Indian consumer market. Amazon has pledged $6.5 billion in investments, while Flipkart, owned by Walmart Inc., recently raised $3.6 billion in the country’s largest fundraising event at a valuation of nearly $38 billion.
Amazon has an interest in an unlisted Futures unit and has argued that it has the first right by contract to refuse to buy Futures. It went to the arbitration court in Singapore last year, accusing Indian retailer Future Group of violating that contract when it agreed to sell its wholesale, warehousing, logistics and other retail assets to Mr Ambani’s conglomerate.
(Except for the headline, this story has not been edited by NewsMadura staff and has been published from a syndicated feed.)