Amazon is set to acquire a 9.5 per cent stake in Future Retail next week, potentially giving the ecommerce platform access to nearly a third of the country’s organised food and grocery market through the Big Bazaar and Nilgiris supermarket chains and other outlets.
The companies started exploring an alliance in January this year when Future Group founder Kishore Biyani first met Amazon founder Jeff Bezos at his Seattle headquarters. That was followed by a series of meetings by executives of both companies in India and the US. ET was the first to report on a potential deal in February.
India allows 51 per cent overseas investment in multibrand retail but Amazon is coming in through the arm that’s registered as an FPI, the route through which it picked up a 5 per cent stake in Shoppers Stop last year. An FPI can acquire less than 10 per cent in an Indian entity as a single firm while an Indian company can dilute up to 49 per cent stake to multiple FPIs. About two months ago, Amazon acquired a stake in More supermarkets from Aditya Birla Retail through Witzig Advisory Services along with co-investor Samara Capital.