BENGALURU (Reuters) – Amazon.com Inc <AMZN.O> said on Wednesday it has sent a legal notice to a promoter of Future Group, alleging the Indian retailer breached the terms of its contract by signing a deal with Mukesh Ambani’s Reliance Industries <RELI.NS>.
The online retail giant last year acquired a 49% stake in Future Coupons Ltd, the promoter entity which owns a 7.3% interest in Future Retail <FTRL.NS>, the operator of more than 1,500 stores in India including grocery chain Big Bazaar.
Amazon’s investment in Future Group came with contractual rights that include a right of first refusal and a non-compete-like pact, a source told https://www.timesnownews.com/business-economy/companies/article/exclusive-amazon-sends-legal-notice-to-future-group-over-ril-deal/663797 ET Now, which first reported the news.
An Amazon spokesperson confirmed the company had started the proceedings.
Amazon, Reliance and Walmart Inc’s <WMT.N> Flipkart are in a battle to gain market share in India, where millions of middle class customers are newly adopting online purchases of food and groceries due to the COVID-19 pandemic.
Reliance said in August it would acquire the retail and wholesale business as well as the logistics and warehousing business of Future in a deal valued at $3.38 billion.
The oil-to-telecoms group, whose retail operation already runs close to 12,000 stores, is expanding its so-called new commerce venture, which ties neighborhood stores to Reliance for online deliveries of groceries, apparel and electronics in a space currently dominated by Flipkart and Amazon’s Indian arm.
Future Group was not immediately available for comment. Reliance declined to comment.
(Reporting by Nivedita Balu and Anyati Bera in Bengaluru; Editing by Ramakrishnan M., Aditya Soni)