Mukesh Ambani's RIL May Offer $20 Billion Stake In Retail Arm To Amazon
By FnF Correspondent | PUBLISHED: 12, Sep 2020, 18:30 pm IST | UPDATED: 12, Sep 2020, 18:32 pm IST
Delhi: After Mukesh Ambani’s Reliance Industries Ltd raked in funding from world’s largest investor Silver Laks to the tune of 7,500 crore in its subsidiary Reliance Retail Ventures (RRVL), there are reports that RIL is offering to sell a roughly $20 billion stake in its retail business to Amazon.com Inc. What is the stake sale all about?In a report by news agency Bloomberg, Amazon seem to be in discussion with regarding its investment in the conglomerate’s Reliance Retail Ventures Ltd. Unit. The world’s largest retailers is trying to negotiate a potential deal where the Mumbai-based Reliance Industries is mulling a stake sell of as much as 40% stake to Amazon. However, the retail behemoth hasn’t yet taken any final decision on the size of its potential investment, and there are chances that the talks could still fall apart.What does it means for the largest growing retail sector in India?
If the deal goes through then it will ensure creation of the retail mammoth in India while making the retail giant’s competitors in the market turn into allies. In the largest growing retail sector, the deal will offer the much needed push to Ambani’s ambitions to create an e-commerce giant for India in line with the Alibaba Group.
As per the report, the deal valued at $20 billion will be the biggest in India as well as for Amazon. Infact, the deal will strengthen the partnership between the two entities indirectly as Ambani’s group also acquired assets of indebted rival Future Group in which Amazon is invested. It had invested in one of Future’s unlisted firms last year and later expanded the alliance.
However, it may raise concerns for other players in the industry who are already starved for cash owing to high debt status.
RIL is also in talks with the US private equity firm KKR & Co. to invest at least $1 billion, and L Catterton is also mulling investing.