Future Retails owns entities such as Big Bazaar, among others.
Future Coupons owned about a 7.3% stake in Future Retail as of early this year, according to past regulatory filings. This means the current deal would give Amazon a 3.58% stake in Future Retail. Financial terms of the deal were not disclosed, though based on Future Retail’s current market cap — about USD 2.9 billion — a 3.58% stake in the company would cost about USD 104 million.
“Amazon has agreed to make an equity investment in Future Coupons Limited for acquiring a 49% stake comprising both, voting and non-voting shares," Future Retail said in a release to the stock exchange.
As part of the agreement, Amazon has been granted a call option. This call option allows Amazon to acquire all or part of the promoters' shareholding in Future Retail and is exercisable between the third and tenth years, in certain circumstances, subject to applicable law, the company said.
With 1,557 stores (spanning 16.27-million sqft) and presence in 437 Indian cities, Future Retail is among India's largest retailers. Amazon entered India's eMarketplace in 2013. A tie-up between the two would allow the Future Group to deleverage even as Amazon would get to push through the concept of converged retail.
Last year, global retail giant Walmart bought a majority stake in Amazon India's eCommerce rival Flipkart.
(Courtesy Agencies)