Reliance – Future Group deal sealed: RIL acquires key businesses of the latter

Reliance Industries Ltd and Future Group announced that the former is acquiring the Retail & Wholesale business and Logistics & Warehousing business of the latter on slump sale basis for lumpsum aggregate consideration of Rs 24713 crore.

Future Group which was seen struggling with liquidity issues will undertake a major reorganization of its businesses in which key group companies namely Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks will be merged into Future Enterprises Limited (FEL).

In a press release, RIL stated that its wholly owned subsidiary Reliance Retail Ventures Limited (RRVL) will be acquiring the key business of Future Group. The Retail & Wholesale business of Future Group which includes key brands such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL) which is a wholly owned subsidiary of RRVL while Logistics & Warehousing Undertaking is being transferred to RRVL. Additionally, RRFLL is expected to invest around Rs 1200 crore in the preferential issue of equity shares of Future Enterprises Ltd (FEL) to acquire 6.09  per cent stake of post-merger equity and Rs 400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75 per cent of the issue price, will further entitle RRFLL to an additional 7.05 per cent stake in FEL.

Post completion of the transaction, FEL will retain the manufacturing and distribution of FMCG goods and integrated fashion sourcing and manufacturing business and its insurance JVs with Generali and JVs with NTC Mills.

Since expectations about the completion and confirmation of the deal had been floating in the markets, stocks of Future Group owned companies have been recording positive gains in recent times.

Read this: https://www.dsij.in/DSIJArticleDetail/ArtMID/10163/ArticleID/14600/Future-Group-stocks-lock-in-at-upper-circuits-Future-Retail-zooms-by-11-per-cent

On Friday, the stock of RIL closed at Rs 2115.60, up by 0.18 per cent or Rs 3.90 per share. The 52-week high is Rs 2198.70 and 52-week low is Rs 867.82 on BSE.

While for the same day, shares of FEL, FLFL, Future Market Networks (FMNL) and Future Consumer had locked in at their respective upper circuits where as stock of Future Retail rose by 3.92 per cent or Rs 5.10 per share to close at Rs 135.25. Future Supply Chain Solutions closed at Rs 151.05, gaining by 1.79 per cent or Rs 2.65 per share.