NEW DELHI: American e-commerce giant Amazon has agreed to buy 49 per cent of Future Coupons Ltd, an entity of the Kishore Biyani-led Future Group, in a deal that will see it gain the rights to acquire the promoter group stake in flagship Future Retail Ltd at a later date.
“We have been informed by Mr. Kishore Biyani on behalf of the existing shareholders forming part of the promoter group and Future Coupons Ltd that they have entered into a share subscription agreement and a shareholders’ agreement with Amazon.com NV Investment Holdings LLC (Amazon),” Future Retail said in an exchange filing late Thursday night.
According to the company, Amazon has been granted a call option which allows it to acquire all or part of “the Promoters’ shareholding in Future Retail Ltd, and is exercisable between the 3rd to 10th years, in certain circumstances, subject to applicable law”.
Further tightening Amazon’s rights to future acquisition, Future said that its promoters have also agreed to certain share transfer restrictions on their shares in the Company for same tenure (3-10 years), including restrictions not to transfer shares to specified persons and a right of first offer in favour of Amazon. All of these will be subject to mutually agreed exceptions, such as liquidity allowances and affiliate transfers, the company added.
Amazon’s investment in Future, and the rights to make more in the future, strengthens its presence in the Indian brick-and-mortar retail market. The e-commerce major already owns the More chain of supermarkets, which it bought from the Kumar Mangalam Birla-led Aditya Birla Group in September last year alongside Samara Capital. More currently runs over 600 stores across the country.
But, Future Retail is a much larger fish than More. The company runs 293 of the popular supermarket chain Big Bazaar and several other smaller retail outlets through its EasyDay and Heritage Fresh brands. The company owns over 1,500 stores across 400 plus cities in total and recorded a revenue of Rs 5,149 crore, up of 13.5 per cent over the same period last year, and a net profit growth of 11 per cent to Rs 170 crore in the quarter ended 30 June.