Amazon likely to buy 7-8pc stake in Future Retail: media reports
Amazon is likely to buy a 7 - 8 percent stake in India’s Future Retail Ltd, through an investment arm, CNBC-TV 18 reported, quoting sources.
The shares of Future Retail touched a high of Rs 503.50, a 16 percent jump from its previous close, after news channels reported the deal.
The potential cash-and-stock deal, which is in its final stages, could be worth Rs 2,500 billion ($338 million) and is likely to be signed in the next two weeks. Currently, the promoters hold around 46.5 percent stake in the company.
Future Retail is the owner of Big Bazaar, EasyDay, Nilgiris and HyperCity. It posted a profit of Rs 11.3 crore for 2017-18, on the back of total revenue of Rs 18,478 crore. The company has a presence in more than 300 cities with 1,035 stores.
In September, Amazon partnered with private equity firm Samara Capital to buy Aditya Birla Group-owned More retail chain for a valuation of Rs 42 billion ($568.03 million).
Earlier this year, media reports said Amazon was in talks to buy a 10 percent stake in Future Retail, at a time when even tech giant Google and Paytm are also in the fray. The company, at that time, had dismissed the reports.
The deal if and when it materialises, will boost Amazon.com Inc in the lucrative Indian retail market where its rival Walmart has already bought a majority stake in home-grown ecommerce company, Flipkart.
The reported talks between two retail giants is not something new. In 2014, Future Group partnered with Amazon India to sell its brands exclusively on the ecommerce giant’s platform.