India's biggest retail chain Reliance Retail on Monday announced its planned takeover of Future Group's assets for $3.4 billion is fully executable under India's regulatory policies and it was looking to finalize the deal soon.
But Amazon doesn't agree and has filed an action to block the deal.
Jeff Bezos' Amazon.com and Mukesh Ambani-led Reliance Industries' fight for dominance of India's e-commerce market is becoming a showdown with both billionaires jockeying for position to acquire the assets of a supermarket chain.
Amazon.com was granted an emergency order from a Singapore adjudication body to stop the two India groups from working out a deal until an arbitration court was created, a source with knowledge of the matter told Reuters. A source disclosed the injunction would prevent Future Group from disposing of its assets to Reliance Retail for around 90 days. Shares of Future Retail fell 3.2% while Reliance's stock dropped 2.4%.
Amazon's deal with Future Retail gave the U.S. e-commerce company the first right to refuse the acquisition of more shares in Future Retail, the India company said earlier in October. Local news reports said the agreement included a noncompete stipulation.
Reliance had agreed to acquire Future's wholesale, retail, warehousing and logistics for $3.4 billion in August - prompting Amazon to seek an emergency court proceeding to halt the buyout. In a separate statement Monday, Future Retail said the company wasn't party to the proceedings and that the matter "will have to be tested" under India's conciliation rules.
Amazon, which has claimed that the deal violated an existing accord, purchased nearly 50% in shares last year in Future Coupons, which owns a 7.3% stake in Future Retail.
An Amazon representative said the company was "grateful for the order which grants all the reliefs that were sought," TechCrunch quoted the representative as saying in a statement. The court proceedings are expected to proceed later this year.
