Amazon in last leg to acquire 10% stake in Future Retail for $281 Mn

After several months of talks, the US-based e-commerce marketplace is now reported to be in the final stage to acquire about 10% stake in Kishore Biyani owned Future Retail Group.

The deal will take place through a holding company and allow Amazon an option to buy more shares in future, according to a Bloomberg report. Since Amazon is paying $281 million for a 10% stake, the Future Retail's valuation pegged at about $2.8 billion.

Though, both the companies involved have not commented on the development. The deal, if materialised, will further help Amazon gain exposure and market insights in India. The fresh investment in Future Group would give a stronghold to Amazon in omnichannel retailing.

This will also give the e-comm marketplace edge over its rival Walmart, which sells goods to small grocery units apart from owning home-grown marketplace Flipkart.

Over a couple of years, Future Group has extended its network and made around seven acquisitions to put together a total retail space of 14.8 million sq ft with a presence in 340 cities.

The second-largest retailer in India claims to have data of more than 500 million consumers. Future Retail operates over 2,000 stores across 400 Indian cities.

Amazon aims to have a larger slice of the modern retail market pie in India, which is estimated to touch $188 billion by 2023.

Amazon-Future Group deal-related reports began doing rounds for the last several months.

In August last year, Amazon was reported to have signed a term sheet with the FB Group. Later, the deal was put on hold as the Government FDI's policy came into effect forcing e-tailers to change their plans.

In the retail segment, this would be Amazon's third investment. Jeff Bezos-led firm had bought a 5% stake in Shoppers Stop for $26.35 million in Oct 2017.

Later in 2018, Amazon along with Samara Capital acquired Aditya Birla-run retail store More.