Amazon India has begun formal negotiations with Future Group to invest USD 600-700 million for a 12-15 percent stake in the Kishore Biyani-led company, Business Standard reports. The two companies have been in talks since January, and have signed term sheets, sources told the paper.
“A term sheet between Amazon and Future has been signed. While the discussion is for a minority stake in the range of 10 to 15 percent, it might be increased. The two firms have begun the process of negotiations,” a source told the publication.
When contacted by the paper, Future Group denied signing any term sheet.
If the transaction between Amazon India and Future Group goes through, it is likely to be a combination of cash and stock, the report said.
A deal with Future Group will help Amazon in the battle against Walmart, which is buying a 77 percent stake in Bengaluru-based Flipkart for USD 16 billion.
Biyani has made several trips to Seattle and Bentonville to hold discussions about a stake sale with Amazon and Walmart respectively, sources told Business Standard.
The Indian retail giant’s subsidiaries Future Retail Ltd and Future Lifestyle Fashions Ltd are public-listed. The company’s brick-and-mortar presence could help Amazon bypass foreign direct investment (FDI) regulations.
Future Group’s brands include Big Bazaar, Food Bazaar, Brand Factory, Central and Pantaloons. The company wants to open 1,000 small stores over the next 15 months. – Moneycontrol