Has India’s richest man Mukesh Ambani finally delivered the deathblow to Amazon? His group, Reliance Industries, and Amazon are engaged in a merciless battle to take control of the vast distribution network of the Indian Future Group. And, at first sight, Mukesh Ambani seems to have been more cunning than his adversary.
It all started in 2020, when Reliance Industries announced that it had reached an agreement for 3.4 billion dollars (3.1 billion euros) with Future Group for the acquisition of its distribution assets. In 2019, Amazon, which also had its sights on those stores, invested $200 million in a subsidiary of Future Group and believed a sale to Reliance violated the terms of that contract.
The American e-commerce giant succeeded in blocking this sale using a range of legal remedies. Future Group, in debt to the tune of 4 billion dollars, has, for its part, always claimed to be in its right, comparing the actions of Amazon to “the ruthless ambition of Alexander the Great”.
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The highly media dispute has had many twists and turns. But the coup, orchestrated by Mukesh Ambani at the end of February, took everyone by surprise. On Friday February 25, Reliance simply began to take control of the operations of some 200 brands, including Big Bazaar supermarkets, the largest brand of the Future group.
These stores are now temporarily closed to customers, the time to convert them… into Reliance brands! Mukesh Ambani’s conglomerate has started poaching Future employees, the World sources close to the case. And that’s just the beginning. Because Reliance has already terminated the leases of nearly 950 Future stores, according to the latter, which previously owned more than 1,500.
While Amazon and Future battled it out in court, behind the scenes, Reliance had been preparing for a long time. According to these same sources, as early as December 2020, Reliance quietly began to take over the supermarket leases from Future Group, unable to pay the rent. The Indian conglomerate initially allowed Future to continue to operate the subleased premises. Unsurprisingly, Future’s delinquencies piled up, ultimately allowing Reliance to justify taking over the operations of these sites.
“It shows the real power of Reliance and what they are capable of”, underlines Satish Meena, independent analyst. Reliance, India’s largest conglomerate, dominates nearly every sector it tackles. Its activities range from petroleum to telecommunications, including distribution. In 2016, he revolutionized the mobile phone market in India, with the launch of his operator Jio. Mukesh Ambani had not spared his competitors, including his own brother, Anil Ambani, with whom he is in open conflict.
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