Shares of India’s Future Group experienced a significant surge of around 20% following the recent decision by the Competition Commission of India (CCI) to suspend Amazon’s 2019 deal with the group. This ruling has significant implications as it could potentially pave the way for Reliance Retail to acquire Future’s retail business. The CCI stated that Amazon had failed to disclose important information during the regulatory approval process for its $200 million investment in Future Group, which is the second-largest retailer in India. Amazon has been using the terms of this deal to block Future’s attempts to sell retail assets worth $3.4 billion to a subsidiary of Reliance Industries Ltd, Amazon’s main competitor in the Indian retail market.

Although the CCI has given Amazon the opportunity to resubmit information for approval, sources indicate that Future is unlikely to cooperate with Amazon if it decides to reapply for antitrust clearance. As of now, there has been no response from Amazon, Reliance, or Future regarding this matter. Amazon has stated that it is reviewing the CCI’s order and will make a decision on its next steps in due course. It is anticipated that Amazon will challenge the ruling in the coming days.

The CCI’s decision has brought a sense of optimism to investors in Future Group. With the involvement of the CCI, there is a stronger indication that Future’s deal with Reliance may proceed with fewer obstacles. However, it is important to note that challenges may still arise in the process. Gaurav Garg, head of research at CapitalVia Global Research, expressed confidence in the potential outcome of the deal.

In response to this positive development, shares of Future Retail, Future Consumer, Future Enterprises, and Future Lifestyle Fashions all experienced a significant increase of nearly 20%. However, shares of Reliance Industries witnessed a decline of 2.7% amidst a broader market selloff. It is worth mentioning that Future Retail shares initially surged when the deal with Reliance was announced in August of last year. However, they subsequently lost around a third of their value due to the obstacles presented by Amazon.

Overall, the suspension of the Amazon deal by India’s antitrust agency has had a positive impact on Future Group stocks and has potentially paved the way for Reliance Retail to acquire Future’s retail business. The involvement of the CCI suggests that there may be fewer obstacles in the deal’s progress, although challenges are still possible. Investors are hopeful about the outcome of the deal, leading to a surge in Future Group stocks. The situation is still developing, and it remains to be seen how the legal battle between Amazon and Future Group will unfold.

For more information on this topic, you can visit the following links:
Reuters: India’s CCI approves Amazon’s stake purchase in Future Retail
Business Standard: Corporate Affairs Ministry asks SEBI to reconsider approving Future’s deal